The Charles Schwab Corporation and Includable Subsidiaries - Page 16

                                           - 16 -                                            
          of payment, (2) the contractual due date, or (3) the taxpayer’s                    
          performance.  See Schlude v. Commissioner, 372 U.S. 128, 133, 137                  
          (1963); Cox v. Commissioner, 43 T.C. 448, 456-457 (1965).  An                      
          accrual basis taxpayer must report income in the year the right                    
          to such income accrues, despite the necessity for mathematical                     
          computations or ministerial acts.  Continental Tie & Lumber Co.                    
          v. United States, 286 U.S. 290, 295-297 (1932); Dally v.                           
          Commissioner, 227 F.2d 724 (9th Cir. 1955), affg. 20 T.C. 894                      
          (1953); Resale Mobile Homes, Inc. v. Commissioner, 91 T.C. 1085,                   
          1095 (1988), affd. 965 F.2d 818 (10th Cir. 1992).  Moreover, the                   
          fact that a taxpayer cannot presently compel payment of the money                  
          is not controlling.  Commissioner v. Hansen, 360 U.S. 446, 464                     
          (1959).                                                                            
                Petitioner argues that its commission is earned when                         
          delivery of the securities and payment of the purchase price                       
          occur, which is not until the settlement date.  According to                       
          petitioner, the acts that it performs between the trade date and                   
          the settlement date are not merely ministerial.  Rather, they are                  
          integral parts of the service for which it is paid a commission,                   
          and they represent a substantial percentage of the total discount                  
          brokerage services provided.  Respondent, on the other hand,                       
          argues that execution of an order on behalf of a customer is the                   
          essential service that petitioner performs and is the time at                      
          which petitioner’s right to receive, and the customer’s                            
          obligation to pay, the commission arises.  According to                            




Page:  Previous  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  Next

Last modified: May 25, 2011