- 2 -
J’s gross income. The amount deducted by CL for 1996
was not includable in J’s gross income as of Mar. 15,
1997 (i.e., 2-1/2 months after the end of CL’s 1996
taxable year), and the amount deducted by CL for 1997
was not includable in J’s gross income as of Mar. 15,
1998 (i.e., 2-1/2 months after the end of CL’s 1997
taxable year).
William H. Gaggos, for petitioners.
John W. Stevens, for respondent.
OPINION
LARO, Judge: This case is before the Court for decision on
the basis of stipulated facts. See Rule 122. Petitioners
petitioned the Court to redetermine deficiencies of $11,284 and
$12,913 in their 1996 and 1997 Federal income tax, respectively.
Following concessions, we are left to decide whether
sections 404(d) and 461(h) require that Clarkston Window & Door,
Inc. (Clarkston), an accrual method S corporation, defer its
deductions of fees owed to J.D. Weaver & Associates, Inc. (J.D.),
a cash method C corporation, for services provided by J.D. to
Clarkston. Clarkston reports its operations on the basis of the
calendar year, and J.D. reports its operations on the basis of a
fiscal year ending July 31. Clarkston deducted each fee in its
taxable year that closed 7 months before the end of the taxable
year in which J.D. included the fee in its income. Clarkston had
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011