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Petitioner, as an accrual method taxpayer with respect to
his business, was required to include in gross income of the
business amounts deposited into the Charleston County Court
account when he acquired the fixed right to receive those
amounts. As in Stendig v. United States, supra, this occurred
when the amounts were received from his clients, even though some
of the proceeds may have been required to be deposited with a
third party. The situation is virtually identical with the facts
in Stendig. Like the partnership in Stendig, petitioner
collected receipts and was required to deposit a portion of them
as a necessary condition of doing business.6 Like the
partnership in Stendig, petitioner did not have access to the
funds while they were on deposit (except for interest earned),
but the funds would ultimately be his; i.e., the deposits would
inure to petitioner’s benefit. The amounts on deposit either
would be returned to him because the level of outstanding bonds
had been reduced or would be used by the clerk toward
satisfaction of petitioner’s obligation under a bond. See
Commissioner v. Hansen, supra at 466. Therefore, we find that
petitioner was required to include in gross income the amounts
deposited into the Charleston County Court account in the year
received from clients.
6 Petitioner argues that in his case the deposits were
required by law rather than by contract. This is irrelevant. In
either case, the deposits were necessary to do business.
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