South Texas Lumber Co. v. Commissioner

U.S. Tax Court

South Texas Lumber Co. v. Commissioner

7 T.C. 669, 1946 U.S. Tax Ct. LEXIS 88

CourtUnited States Tax Court

DecidedAugust 30, 1946

DocketDocket No. 10050

StatusPublished

Cited by1 cases

This text of 7 T.C. 669 (South Texas Lumber Co. v. Commissioner) is published on Counsel Stack Legal Research, covering United States Tax Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

South Texas Lumber Co. v. Commissioner, 7 T.C. 669, 1946 U.S. Tax Ct. LEXIS 88 (tax 1946).

Pincite

Opinion

OPINION.

HaRlan, Judge:

Since the hearing of this case and since the filing of petitioner’s brief a case, undistinguishable on its relevant facts from the case at bar, has been decided by this Court. On July 11, 1946, this Court decided, in Kimbrell's Home Furnishings, Inc., 7 T. C. 339, that a corporation engaged in the sale of furniture at retail on the installment basis could not, in the computation of its equity invested capital, include unrealized profits as represented by unpaid installment notes received from the purchasers at the time of the sale. All of the questions raised by both the petitioner and the respondent herein are fully discussed in the decision in the Kimbrell's Home Furnishings, Inc., case.

Petitioner, in his reply brief, seeks to distinguish the Kimbrell case from the one at bar, due to the fact that in the former case the taxpayer computed its net income on the installment basis as provided by section 44 (a) and its excess profits net income on the accrual basis, whereas in the case at bar the taxpayer filed its income and excess profits tax returns on the accrual basis, but “elected to compute and report the profit” from its installment sales under section 44 (a).

The claimed distinction impresses us as being without substance. In both cases the taxpayers included anticipated and unreported profits from installment sales in equity invested capital as “accumulated earnings and profits.”¹ Approval of this treatment of anticipated and unreported profits from installment sales would be equivalent to an admission that a different rule applies in the computation of accumulated earnings and profits for excess profits purposes than in the computation of earnings and profits for income tax purposes. In Federal Union Insurance Co., 5 T. C. 374, we held to the contrary.

Judgment will be entered for the respondent.

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

OPINION.

HaRlan, Judge:

Since the hearing of this case and since the filing of petitioner’s brief a case, undistinguishable on its relevant facts from the case at bar, has been decided by this Court. On July 11, 1946, this Court decided, in Kimbrell's Home Furnishings, Inc., 7 T. C. 339, that a corporation engaged in the sale of furniture at retail on the installment basis could not, in the computation of its equity invested capital, include unrealized profits as represented by unpaid installment notes received from the purchasers at the time of the sale. All of the questions raised by both the petitioner and the respondent herein are fully discussed in the decision in the Kimbrell's Home Furnishings, Inc., case.

Petitioner, in his reply brief, seeks to distinguish the Kimbrell case from the one at bar, due to the fact that in the former case the taxpayer computed its net income on the installment basis as provided by section 44 (a) and its excess profits net income on the accrual basis, whereas in the case at bar the taxpayer filed its income and excess profits tax returns on the accrual basis, but “elected to compute and report the profit” from its installment sales under section 44 (a).

The claimed distinction impresses us as being without substance. In both cases the taxpayers included anticipated and unreported profits from installment sales in equity invested capital as “accumulated earnings and profits.”¹ Approval of this treatment of anticipated and unreported profits from installment sales would be equivalent to an admission that a different rule applies in the computation of accumulated earnings and profits for excess profits purposes than in the computation of earnings and profits for income tax purposes. In Federal Union Insurance Co., 5 T. C. 374, we held to the contrary.

Judgment will be entered for the respondent.

Cite This Page — Counsel Stack

Bluebook (online)

7 T.C. 669, 1946 U.S. Tax Ct. LEXIS 88, Counsel Stack Legal Research, https://law.counselstack.com/opinion/south-texas-lumber-co-v-commissioner-tax-1946.

Opinion

Related

Cite This Page — Counsel Stack