Mereen-Johnson Machine Co. v. Commissioner

Board of Tax Appeals

Mereen-Johnson Machine Co. v. Commissioner

5 B.T.A. 400

CourtUnited States Board of Tax Appeals

DecidedNovember 9, 1926

DocketDocket No. 3531

StatusPublished

Cited by1 cases

This text of 5 B.T.A. 400 (Mereen-Johnson Machine Co. v. Commissioner) is published on Counsel Stack Legal Research, covering United States Board of Tax Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Mereen-Johnson Machine Co. v. Commissioner, 5 B.T.A. 400 (bta 1926).

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Opinion

[402]*402OPINION.

TRUssell :

Although the petitioner did not in its orignial income-tax returns for the years here under consideration claim a deduction for exhaustion of patent values, it is not precluded from now asserting a claim to such deductions. Appeal of Union Metal Mfg. Co., 1 B. T. A. 395.

Respecting the March 1, 1913, value of petitioner’s patents, the record is not as clear as might bo desired, but the fact that during the five years prior to 1913 the sales of machines made under these patents were maintained at a comparatively steady figure and that the net income of the company during the same years showed a similar steady production of profits convinces us that these patents had a value which must be reflected in the profits realized, and we are of the opinion, and therefore find, that the March 1, 1913, value of the two patents described in the findings of fact is $7,500, and that for the years here under consideration the petitioner is entitled to the deduction from gross income on account of the exhaustion of such values computed on the basis of the average life of the said two patents after March 1, 1913.

A redetei-mination of the deficiencies in accordance with the foregoing findings of fact and opinion will he made on 15 days’ notice, under Rule 50, and judgment will be entered accordingly.

Sternhagen dissents.

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[402]*402OPINION.

TRUssell :

Although the petitioner did not in its orignial income-tax returns for the years here under consideration claim a deduction for exhaustion of patent values, it is not precluded from now asserting a claim to such deductions. Appeal of Union Metal Mfg. Co., 1 B. T. A. 395.

Respecting the March 1, 1913, value of petitioner’s patents, the record is not as clear as might bo desired, but the fact that during the five years prior to 1913 the sales of machines made under these patents were maintained at a comparatively steady figure and that the net income of the company during the same years showed a similar steady production of profits convinces us that these patents had a value which must be reflected in the profits realized, and we are of the opinion, and therefore find, that the March 1, 1913, value of the two patents described in the findings of fact is $7,500, and that for the years here under consideration the petitioner is entitled to the deduction from gross income on account of the exhaustion of such values computed on the basis of the average life of the said two patents after March 1, 1913.

A redetei-mination of the deficiencies in accordance with the foregoing findings of fact and opinion will he made on 15 days’ notice, under Rule 50, and judgment will be entered accordingly.

Sternhagen dissents.

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Bluebook (online)

5 B.T.A. 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mereen-johnson-machine-co-v-commissioner-bta-1926.

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