Borin Corp. v. Commissioner
United States Board of Tax Appeals
Petitioner entered into a contract to purchase certain machinery, but before the contract was fully performed a second contract was agreed upon and executed whereby the original contract was rescinded and the rights and liabilities of the parties thereunder were canceled. Under the new contract the purchase price for the machinery was substantially reduced and the terms and conditions of the sale differed materially from those contained in the former contract.
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Petitioner entered into a contract to purchase certain machinery, but before the contract was fully performed a second contract was agreed upon and executed whereby the original contract was rescinded and the rights and liabilities of the parties thereunder were canceled. Under the new contract the purchase price for the machinery was substantially reduced and the terms and conditions of the sale differed materially from those contained in the former contract. Held, that petitioner's basis for computing depreciation on machinery and the profit or loss on the sale thereof is to be determined…
1Opinion of the Court
*718OPINION.
Turner :
The petitioner contends that the basis for computing the depreciation deduction on its plant and the profit realized upon the sale thereof is $146,800, the purchase price recited in the contract of October 10,1980, and that the contract of November 7,1932, contrary to its expressed terms, was not a contract of sale but was a supplemental contract entered into for the purpose of effecting the payment of damages to petitioner and the crediting of the damages so paid on the purchase price of the plant, which remained and continued to be $146,800 as originally agreed. In support…
2Cases cited7 opinions
- United States Ex Rel. International Contracting Co. v. LamontSupreme Court of the United States · 1894
- Housekeeper Pub. Co. v. SwiftCourt of Appeals for the Eighth Circuit · 1899
- Joseph v. RottschaferMichigan Supreme Court · 1929
- Gilbert & Secor v. United StatesSupreme Court of the United States · 1868
- Denler & Denler Land Co. v. EbyMichigan Supreme Court · 1936
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3Cited by1 opinion
- Borin Corp. v. CommissionerUnited States Board of Tax Appeals · 1939