5 B.T.A. 108

Appeal of Cincinnati, Findlay & Ft. Wayne Railway Co., J. B. Carothers, Receiver.

Docket No. 4886.

Decided October 20, 1926.

Leo B. Kagan, Esq., for the petitioner.

Percy S. Grewe, Esq., for the Commissioner.

Phillips :

This is an appeal from the determination of a deficiency in income tax, in the amount of $1,597.39, for the calendar year 1922. The only question involved is whether the amount of $18,000, paid by the United States Railroad Administration to the taxpayer ⅛ *1091922, constitutes taxable income to it in that year, as contended by the Commissioner. The facts are admitted, and the admissions are copied verbatim.

BINDINGS OR FACT.

J. B. Carothers was appointed receiver of the Cincinnati, Findlay & Ft. Wayne Bailway Co. on March 15, 1917. From March 15, 1918, to August 31, 1918, the railroad was under Federal control and was operated by the United States Bailroad Administration, and during that period all of its accounts were handled by the Nickel Plate Bailroad. On the latter date, operation of the railroad was discontinued and it has not been operated since that date. On November 18, 1918, the property of the company was sold under foreclosure proceedings and the sale was confirmed on November 19,1918, by order of the United States District Court for the Western Division of the Southern District of Ohio.

In June, 1922, the United States Bailroad Administration paid to the receiver the sum of $18,000 for the possession, use, and occupation of the property of the railway company for the period in 1918 that it was under Federal control. The return of the taxpayer for the taxable year 1918 showed a deficit of $23,730.99.

For the year 1922 the receiver filed an income-tax return on behalf of the railway company, showing a deficit of $1,322.82. On auditing the return the Commissioner, by adding the amount of $18,000, above mentioned, to the income reported, found a net income for the year of $16,677.18, and computed thereon the tax involved in this appeal.

The books of the railway company were kept on an accrual basis, as required by the Interstate Commerce Commission.

There is no deficiency for 192%, and an order will he entered accordingly. Appeal of Illinois Terminal Qo., 5 B. T. A. IB.

Marquette, Smith, and Sternhagen dissent.

Appeal of Cincinnati, Findlay & Ft. Wayne Railway Co.
5 B.T.A. 108

Case Details

Name
Appeal of Cincinnati, Findlay & Ft. Wayne Railway Co.
Decision Date
Oct 20, 1926
Citations

5 B.T.A. 108

Jurisdiction
United States

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