113 T.C. No. 23
UNITED STATES TAX COURT
USFREIGHTWAYS CORPORATION, f.k.a. TNT FREIGHTWAYS CORPORATION
AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 459-98. Filed November 2, 1999.
P, an accrual method taxpayer, made expenditures during the
1993 taxable year for licenses and insurance which had an
effective period extending into 1994. For purposes of book
accounting and financial reporting, P ratably allocated these
costs over the periods to which they related. For tax accounting
purposes, however, P currently deducted all license and insurance
expenses in the year of payment. Held: On the facts, P, as a
taxpayer utilizing the accrual method, is not entitled to
currently deduct costs benefiting future tax periods in the year
of payment. R’s determination of a deficiency is sustained.
Rex A. Guest and Melvin L. Katten, for petitioner.
Joseph P. Grant and Robin L. Herrell, for respondent.
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