-86-
that, pursuant to that section, as interpreted by Thor Power Tool
Co. v. Commissioner, 439 U.S. 522 (1979), and Bamert v.
Commissioner, 8 B.T.A. 1099 (1927), the market for each of
Consolidated's customer cores is the current bid price (i.e., the
replacement cost) for a customer core of the same type that was
prevailing at the respective dates of Consolidated's inventory in
the marketplace in which Consolidated actually participated and
that that marketplace is the marketplace in which it obtained
customer cores from its customers. According to respondent, the
current bid price or replacement cost for a customer core that
was included in Consolidated's inventories at the end of each of
the years at issue is the core credit amount for a customer core
of the same type that was prevailing at the end of each of those
years.
Section 1.471-4(a) and (b), Income Tax Regs., provides in
pertinent part:
(a) Under ordinary circumstances and for normal
goods in an inventory, "market" means the current bid
price prevailing at the date of the inventory for the
particular merchandise in the volume in which usually
purchased by the taxpayer, and is applicable in the
cases--
(1) Of goods purchased and on hand, and
(2) Of basic elements of cost (materials
* * *) in goods in process of manufacture and
in finished goods on hand; * * *
(b) Where no open market exists or where
quotations are nominal, due to inactive market
conditions, the taxpayer must use such evidence of a
fair market price at the date or dates nearest the
Page: Previous 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 NextLast modified: May 25, 2011