Farmville Oil & Fertilizer Co. v. Commissioner
United States Board of Tax Appeals
A charge to "reserve for inactive contingencies" which includes possible discounts and other subsequent adjustments of prices on sales, held, not to be deductible as such, and no part thereof, upon the evidence, to be deductible as an addition to a reserve for bad debts.
1Opinion of the Court
*1049OPINION.
Sternhagen:
The petitioner, having for the fiscal year ended July 31,1930, charged to “ fertilizer discount account ” and credited ■ to “ reserve for inactive contingencies ” $21,545.42, which it deducted on its tax return, used this amount as a reduction of gross sales in arriving at the gross income shown upon its return. The Commis*1050sioner in effect disallowed $20,859.70 of this amount and restored so much to gross income. Strictly speaking, therefore, the disallowance of the Commissioner is not of a statutory deduction. The petitioner, however, in assailing the Commissioner’s…
2Cases cited2 opinions
- Brown v. HelveringSupreme Court of the United States · 1934
- C. P. Ford & Co. v. CommissionerUnited States Board of Tax Appeals · 1933
3Cited by15 opinions
- James A. Messer Co. v. CommissionerUnited States Tax Court · 1972
- Roanoke Vending Exchange, Inc. v. CommissionerUnited States Tax Court · 1963
- Rio Grande Bldg. & Loan Ass'n v. CommissionerUnited States Tax Court · 1961
- Burbank Liquidating Corp. v. CommissionerUnited States Tax Court · 1963
- Investors Discount Corp. v. CommissionerUnited States Tax Court · 1967
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