BUSA427_Chapter6.docx - Chapter 6 Ch. 6: Question 59 a. New...

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Chapter 6Ch. 6: Question 59a. New Colonial Ice Co. 4 USTC ¶1292, 292 U.S. 435:1) The issue in this case was: Could a new corporation taking over an oldercorporation have its taxable income for the succeeding period computed anddetermined by deducting from its net income for that period the net lossessustained by the older corporation in the preceding period? The cases used todetermine their rights were: Pioneer Pole & Shaft Company v. Commissioner, 55F. (2d) 861 [3 USTC ¶872]; Industrial Cotton Mills v. Commissioner, 61 F. (2d)291; and H. H. Miller Industries Co. v. Commissioner, 61 F. (2d) 412.
2) The Supreme Court decided that for New Colonial Ice Co: every deductionfrom gross income is a matter of legislative grace, any particular deduction isallowable only if there is a clear provision therefor and, hence, a taxpayer seekinga deduction must be able to point to an applicable statute and show that thetaxpayer comes within its terms. The law used was: §204(b) of the Revenue Actof 1921, c. 136, 42 Stat. 227, 231.b. Welch v. Helvering, 3 USTC ¶ 1164, 290 U.S. 111:

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Term
Fall
Professor
fabioambrosio
Tags
Accounting, Revenue, Net Income, Supreme Court of the United States, Taxation in the United States, Generally Accepted Accounting Principles, Deduction

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