Meyer Bros., Inc. v. Commissioner
United States Tax Court
1. Held, rental expenses, taken as a deduction by a corporation should be reduced in the amount of an allowance granted by the lessor to the corporation for replacement and repair of rented items. 2. Held, deduction for contributions should be increased to 5 per cent statutory limit on the increased net income.
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The initial question to be determined is the proper amount deductible as rent by the petitioner.1 The lease agreement for the five buildings, equipment, machinery, and fixtures rented by the petitioner for 25 years required the petitioner, in paragraph 6, to pay a fixed percentage of net sales as rent with a minimum of $50,000 annually. This amount was accrued and deducted by the petitioner upon its return. The amount of $1,641.56 was accrued on the petitioner’s books as a reserve for the replacement of equipment. This amount was not paid or accrued to the lessor.…
2Cases cited4 opinions
- Lucas v. American Code Co.Supreme Court of the United States · 1930
- Brown v. HelveringSupreme Court of the United States · 1934
- Broadcast Measurement Bureau, Inc. v. CommissionerUnited States Tax Court · 1951
- Frankenfield v. CommissionerUnited States Tax Court · 1952
3Cited by3 opinions
- Consolidated Foods Corp. v. CommissionerUnited States Tax Court · 1976
- Consolidated Foods Corp. v. CommissionerUnited States Tax Court · 1976
- Meyer Bros., Inc. v. CommissionerUnited States Tax Court · 1952