Summit Sheet Metal Co. - Page 3

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          year petitioner declared the bonuses to the following year when             
          the bonuses were paid because it is a change in accounting method           
          under section 446(e).  We hold that it must.                                
               3.   Whether petitioner's net recognized built-in gain was             
          more than 50 percent of its taxable income in the year in issue.            
          We hold that it was.                                                        
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          A.   Petitioner                                                             
               Petitioner is a California corporation which was                       
          incorporated on August 30, 1960.  Its principal place of business           
          was in Orange County, California, when it filed the petition in             
          this case.                                                                  
               Petitioner manufactured and installed flashing, vents,                 
          pipes, and light-gauge sheet metal for housing projects in                  
          southern California.  Ninety percent of petitioner's business was           
          sheet metal installation, and 10 percent was sheet metal                    
          fabrication.  There were 8 to 10 other companies in Orange County           
          also doing that work.  Petitioner served a large part of southern           
          California, including the counties of San Diego, Orange, Los                
          Angeles, and Riverside.                                                     
               Petitioner's fiscal years ended on June 30 in 1964, 1966 to            
          1975, 1977, 1978, 1980 to 1982, 1984, and 1985.  In 1986,                   
          petitioner changed the end of its fiscal year from June 30 to               





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