UNITED STATES OF AMERICA, APPELLANT,
v.
JACK SHARP MITCHELL, AND WIFE THELMA MITCHELL, APPELLEES
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
The court held that a taxpayer must report gain credited to dealer's reserve accounts as income in the year of sale, not when payments are received.
An accrual basis taxpayer sold automobiles on credit, discounting customer obligations with finance companies. The taxpayer realized gain in cash and …
The full statement of facts, procedural history, and disposition for this case are member content.
Join FLexlaw to unlock all legal intelligence© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Explore caselaw by topic → Browse Realization Of Gain cases and more on FLexlaw
PER CURIAM.
In this case an accrual basis taxpayer sold automobiles on credit, discounting his customers’ obligations with finance companies. The taxpayer realized part of his gain in cash and part in the form of amounts credited to dealer’s reserve accounts to be satisfied either by payment in cash or by offset against the taxpayer’s obligations. The question for decision is whether the taxpayer was required to report the amount of gain credited to the dealer’s reserve account (as well as the gain in cash) as income for the year in which the sales and credits were made rather than as income for the year in which payments from the reserve accounts were actually received.
After the rendition of the judgment below in the instant case, the Supreme Court decided the same issue adversely to the taxpayer in Commissioner of Internal Revenue v. Hansen, 360 U.S. 446, 79 S.Ct. 1270, 3 L.Ed.2d 1360 (affirming Baird v. Commissioner, 7 Cir., 256 F. 2d 918; and reversing Hansen v. Commissioner, 9 Cir., 258 F. 2d 585 and Glover v. Commissioner, 8 Cir., 253 F. 2d 735); United States v. Hine Pontiac, 360 U.S. 715, 79 S.Ct. 1443, 3 L.Ed.2d 1539 (reversing judgments in three cases entered by the .Fifth Circuit on stipulation (2 A.F.T.R. 2d 5812) ), rehearing denied October 12, 1959; United States v. Colonial Chevrolet Corp., 360 U.S. 716, 79 S.Ct. 1444, 3 L.Ed.2d 1539 (reversing judgments in two cases entered by the Fourth Circuit on stipulation (3 A.F.T.R.2d 378, 917) ), rehearing denied October 12, 1959.
The Court has considered the taxpayer’s alternative arguments. We consider that they are without merit.
The judgment must be reversed.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Authorities Cited
- Commissioner of Internal Revenue v. Hansen et ux., 360 U.S. 446 (U.S. 1959)
- Hansen v. Commissioner OF Internal Revenue, 258 F.2d 585 (9th Cir. 1958)
- Burl P. Glover v. Commissioner OF Internal Revenue, 253 F.2d 735 (8th Cir. 1958)
- Baird v. Commissioner OF Internal Revenue, 256 F.2d 918 (7th Cir. 1958)
- Illinois v. Michigan, 360 U.S. 712 (U.S. 1959)
- United States v. Hine Pontiac, 360 U.S. 715 (U.S. 1959)
- United States v. Colonial Chevrolet Corp., 360 U.S. 716 (U.S. 1959)