- 12 - Respondent takes exception to petitioner's characterization of the upfront payments as constituting advance trade discounts exclusively. Respondent notes that, under each purchase contract, Westpac agreed to maintain the manufacturer as the primary or exclusive supplier of the relevant product line. In addition, under the American Greetings and GTE Sylvania contracts, Westpac agreed to maintain a specified amount of shelf space for the manufacturer's product. Respondent therefore argues that some portion of the upfront cash payments should be characterized as made in consideration of these non-volume- related commitments. We hold that Westpac is not entitled to defer recognition of the payments as income beyond the year of receipt. We explain our decision below. B. Tax Treatment of Payments Section 61 broadly defines gross income as “all income from whatever source derived”. See also sec. 1.61-1(a), Income Tax Regs. In interpreting a predecessor to section 61, the Supreme Court determined that the broad statutory language evidenced congressional intent to tax all gains except those specifically exempted. See Commissioner v. Glenshaw Glass Co., 348 U.S. 426, 7(...continued) obligation. We therefore agree with petitioner that an implicit repayment obligation existed in Westpac's contracts with Ambassador and American Greetings.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011