Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 76

                                        -76-                                          
          that Consolidated paid to acquire a customer core) were                     
          determined on the basis of market-related factors, such as supply           
          and demand.  We conclude that Redwing Carriers, Inc. v.                     
          Tomlinson, 399 F.2d 652 (5th Cir. 1968), does not control our               
          resolution of the issue presented here.                                     
               Nor does Burrell v. Commissioner, 400 F.2d 682 (10th Cir.              
          1968), govern our resolution of the inventory accounting issue              
          under section 471 that is involved in the instant case.  In                 
          Burrell v. Commissioner, supra, the Court of Appeals for the                
          Tenth Circuit, to which an appeal in this case would generally              
          lie, recited the facts on which it relied as follows:                       
                    In 1962, William P. Burrell,* * * as a sole                       
               proprietor, was engaged in reboring automobile engine                  
               blocks, called "cores," using them to rebuild                          
               automobile engines which he sold to both retail and                    
               wholesale customers.  In order to maintain an inventory                
               of cores to be rebored, Burrell desired that each                      
               customer to whom he sold a rebuilt engine with a                       
               rebored core therein, deliver to him the old core in                   
               the automobile engine which the rebuilt engine                         
               replaced, or a like old core from an automobile engine                 
               of the same make.                                                      
                    The amount of the bill which Burrell rendered to                  
               customers who purchased from him rebuilt engines with                  
               rebored cores was for a single amount, which, in fact,                 
               was made up of two items.  Such items were reflected                   
               separately on an invoice furnished to the customer.                    
               Item One on such invoice was for the rebuilt engine.                   
               Item Two was for the core from the old engine, or a                    
               substitute therefor, to be delivered to Burrell by the                 
               customer.                                                              
                         *    *    *    *    *    *    *                              
                    When a new core was returned, Item Two was                        
               cancelled, although the actual value of the old core                   
               did not equal the amount of the Item Two charge.  Such                 




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