George L. Schultz and Margaret F. Schultz v. Commissioner of Internal Revenue

Third Circuit

George L. Schultz and Margaret F. Schultz v. Commissioner of Internal Revenue

420 F.2d 490, 25 A.F.T.R.2d (RIA) 391, 1970 U.S. App. LEXIS 11268

CourtCourt of Appeals for the Third Circuit

DecidedJanuary 9, 1970

Docket17764_1

StatusPublished

Cited by27 cases

This text of 420 F.2d 490 (George L. Schultz and Margaret F. Schultz v. Commissioner of Internal Revenue) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

George L. Schultz and Margaret F. Schultz v. Commissioner of Internal Revenue, 420 F.2d 490, 25 A.F.T.R.2d (RIA) 391, 1970 U.S. App. LEXIS 11268 (3d Cir. 1970).

Pincite

Opinion

OPINION OF THE COURT

PER CURIAM.

On this appeal the appellant taxpayers challenge the Tax Court’s Decision that their four year pre-payment of storage charges, insurance premiums and state ad valorem taxes, in conjunction with their non-business purchase of substantial quantities of bulk whiskey, were not deductible as ordinary and necessary expenses under Section 212(2) of the 1954 Internal Revenue Code, but instead should be added to the cost of the whiskey.

The distinction between an ordinary expense and a capital expenditure in this field is based on a factual analysis of the relationship of the expenses to the entire transaction. Although storage charges, insurance premiums, and property taxes are normally deductible as ordinary expenses, they are not deductible where they are incurred as an integal part of a capital transaction. The Tax Court’s determination that the pre-payments here made were incurred as part of a capital transaction is essentially a factual determination.

On review of the record we cannot say that the factual determination made by the Tax Court is “clearly erroneous”, and accordingly its Decision will be affirmed.

Free access — add to your briefcase to read the full text and ask questions with AI

OPINION OF THE COURT

PER CURIAM.

On this appeal the appellant taxpayers challenge the Tax Court’s Decision that their four year pre-payment of storage charges, insurance premiums and state ad valorem taxes, in conjunction with their non-business purchase of substantial quantities of bulk whiskey, were not deductible as ordinary and necessary expenses under Section 212(2) of the 1954 Internal Revenue Code, but instead should be added to the cost of the whiskey.

The distinction between an ordinary expense and a capital expenditure in this field is based on a factual analysis of the relationship of the expenses to the entire transaction. Although storage charges, insurance premiums, and property taxes are normally deductible as ordinary expenses, they are not deductible where they are incurred as an integal part of a capital transaction. The Tax Court’s determination that the pre-payments here made were incurred as part of a capital transaction is essentially a factual determination.

On review of the record we cannot say that the factual determination made by the Tax Court is “clearly erroneous”, and accordingly its Decision will be affirmed.

Cite This Page — Counsel Stack

Bluebook (online)

420 F.2d 490, 25 A.F.T.R.2d (RIA) 391, 1970 U.S. App. LEXIS 11268, Counsel Stack Legal Research, https://law.counselstack.com/opinion/george-l-schultz-and-margaret-f-schultz-v-commissioner-of-internal-ca3-1970.

Opinion

Related

Cite This Page — Counsel Stack