Twin Disc Clutch Co. v. Commissioner

APPEAL OF TWIN DISC CLUTCH CO. Twin Disc Clutch Co. v. Commissioner Docket No. 3015. United States Board of Tax Appeals 2 B.T.A. 1327; 1925 BTA LEXIS 2092; November 11, 1925, Decided Submitted July 2, 1925. *2092 Wm. S. Hammers, Esq., for the taxpayer. Lee I. Park, Esq., for the Commissioner. *1327 Before MARQUETTE and MORRIS. This appeal is from the determination of a deficiency in income and profits taxes for the year 1919 in the amount of $99.28. Two questions are involved: Whether the taxpayer is entitled to deduct in 1919 depreciation on a patent application, patent for which did not issue until 1921; and whether the taxpayer is entitled to deduct the Wisconsin income tax as an accrued liability of 1919? The appeal was submitted on a stipulation of facts. FINDINGS OF FACT. The taxpayer is a Wisconsin corporation, with its office located at Racine. It was organized in September, 1918, with authorized common stock of 1,500 shares of par value of $150,000, of which 200 shares were issued for organization expenses. On September 30, 1918, the taxpayer acquired from Thos. L. Fewick, the inventor, patent application No. 220147 and issued *1328 therefor 400 shares of its common stock having a par value of $40,000. The patent was issued September 13, 1921. In October, 1919, the taxpayer's common stock to the amount of 600 shares was sold for*2093 $36,325 paid in cash and $10,850 paid by interest-bearing notes. The State of Wisconsin normal income tax shown on the 1920 tax roll, assessed on the net income of the taxpayer for 1919, amounted to $126.84. The taxpayer paid a personal-property tax in Wisconsin during 1920 in an amount in excess of said assessment of $126.84, and the personal-property tax paid was credited against said assessment of income tax in accordance with the income-tax law of the State of Wisconsin. DECISION. The determination of the Commissioner is approved.