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ABANDONMENT. See DEPRECIATION, V; LOSSES, II, 1-8; III, 7.
ABATEMENT CLAIMS.

See LIMITATIONS, 11.

ABNORMALITY. See INVESTED CAPITAL, XVI.

ABSTRACTS OF TITLE. See CAPITAL EXPENDITURES, II, 10; GAIN OR
Loss, II, 26, 53.

ACCELERATED DEPRECIATION. See DEPRECIATION, IV (4).

ACCOUNTANTS. See PERSONAL SERVICE CORPORATIONS, 15.
ACCOUNTING:

I. Methods of Accounting, p. 1433.
(1) Accrual or Cash, p. 1433.
(2) Accrual or Installment.

II. Periods of Accounting, p. 1433.

See NET INCOME; PARTNERS, II, 4.

See INSTALLMENT SALES.

Accrual or cash. See I (1), infra; BAD DEBTS, II, 10; CARRIERS, 2;
COMPENSATION, 1, 2; CREDITS, I, 7; DIVIDENDS, II, 5; EXPENSES, II;
IV, 7-20; VII; GAIN OR LOSS, I, 26; INTEREST, 3; INVENTORIES, I, 11;
LOSSES, I, 9, 10; III, 1, 2; PARTNERS, II, 1, 2; TAXES, II (2).
Accrual or installment. See INSTALLMENT SALES; INVESTED CAPITAL,
XVII, 6.

Books. See ACCOUNTING; BAD DEBTS; EVIDENCE, II, 14, 15; III;
EXPENSES, IV, 1, 2, 8, 16, 18, 24; GIFTS, 3; INSURANCE, 1; INVESTED
CAPITAL, Í, 3; IV, 1; VII, 7; XV, 7; NET INCOME, 3.
Charging off bad debts. See BAD DEBTS.

Constructive receipt. See COMPENSATION, 1; PARTNERS, II, 1, 2.

1. Cash Basis. Partnership profits which are earned prior to, and remain uncollected at, death of partner on cash basis are not taxable income of partner for period up to date of death. Ethel D. Hearn..

2. Evidence of Basis. Taxpayer used opening and closing inventories, sold goods on credit for which debits were made to accounts receivable and credits to sales account; payments on such accounts were credited accordingly. Held, books were kept on accrual basis. Coatesville Boiler Works_ 3. Id. Id.

Fact that some deferred items were not accrued held immaterial.

(2) Accrual or Installment. See INSTALLMENT SALES. II. PERIODS OF ACCOUNTING. See NET LOSSES, 5, 6.

Prior Years. Amounts representing an accumulation of income for prior years, which were not returned in such years, may not be included in income for subsequent years. Cooper-Brannan Naval Stores Co‒‒‒‒‒‒‒

ACCOUNTS PAYABLE. See INVESTED CAPITAL, III.

1362

1242

105

1433

Page

ACCOUNTS RECEIVABLE.

See BAD DEBTS, II, 3, 6; V, 1; Expenses, IV, 2; INVESTED CAPITAL, IX, 18; XVII, 1-3, 6; Losses, I, 9.

ACCRUAL:

Cash or accrual. See ACCOUNTING, I (1); Bad DEBTS, II, 10; Carriers,
2; COMPENSATION, 1, 2; CREDITS, I, 7; DIVIDENDS, II, 5; EXPENSES,
II; IV, 7–20; VII; GAIN OR Loss, I, 26; INTEREST, 3; INVENTORIES,
I, 11; LOSSES, I, 9, 10, III, 1, 2; PARTNERS, II, 1, 2; TAXES, II (2).
Installment or accrual. See INSTALLMENT Sales; Invested Capital,

XVII, 6.

ADMINISTRATION. See ESTATE TAX; ESTATES AND TRUSTS.
ADMINISTRATIVE DECISIONS. See EXEMPTIONS, 2; JURISDIC-
TION, I, 2.

1. Commissioner; Regulations. Commissioner may not, by regulations, add to or detract from provisions of taxing statutes, and regulations contrary to such statutes are of no force or effect. H. Humphreys___

2. Id. An administrative interpretation of a revenue law, made by Commissioner in regulations promulgated under authority thereof, receives added weight by enactment of similar provisions in subsequent laws without material change, and will not be disturbed unless it is clearly contrary to intent of Congress. Uniform Printing & Supply Co.........

3. Id. Rulings of Commissioner published in a bulletin, other than Treasury Decisions, are not regulations published pursuant to law with approval of Secretary of Treasury. New England Furniture Co___.

4. Id. Reconsideration. Commissioner may reconsider decision of his predecessor in office on a question of law, unless precluded by statute of limitations. Estate of W. S. Tyler---

ADMISSIBLE ASSETS. See INVESTED CAPITAL, II.

ADVERTISING. See PERSONAL SERVICE CORPORATIONS, 16.
AFFILIATIONS:

I. Generally, p. 1434.

II. Ownership or Control by Corporations, p. 1435.

III. Ownership or Control by Same Interests:

(1) Generally, p. 1435.

(2) Percentage of Stock Ownership, p. 1435.
(3) Control of Minority Stock, p. 1435.

IV. Period of Affiliation, p. 1436.

See AMORTIZATION, 13; CAPITAL TRANSACTIONS, 3; INVESTED CAPITAL,
V; LIMITATIONS, 3; PRACTICE AND PROCEDURE, I; RETURNS, 2, 4.
I. GENERALLY.

1. Findings of Fact. Where, after hearing, counsel for Commissioner admits that evidence clearly establishes affiliation, and his view of evidence is in accord with judgment of Board, affiliation will be granted without formal findings of fact. Pan American Wall Paper Co...

2. Control; Business. Control of business of a corporation is not control of its stock and, where there are quiescent stockholders representing a sizeable minority, such control does not amount to control of substantially all the stock. Ice Service Co____

3. Id. Finances. Although purchase by taxpayer of claims against another corporation and endorsement of its notes results in creation of a substantial indebtedness so that taxpayer is able to control payment of dividends to minority stockholders and render ineffective the voting rights of their stock, such control of financial affairs of corporation does not amount to control of individual stockholders or their stock. Id.

4. Id. Identity of Officers. Fact that certain officers serve both corporations in same capacity does not establish control of minority stock. Id.

246

251

334

255

248

383

AFFILIATIONS-Continued.

5. Id. Lease. Control by one corporation of entire property of
another through a long-term lease held insufficient to support a finding of
affiliation, where lessee owned but a small part of stock of lessor and
there was no evidence that stockholders of lessor and lessee constituted
"closely affiliated" or "same interests, or that lessor controlled stock of
lessee, or vice versa. Holyoke & Westfield R. R. Co.......

6. Id. Taxpayer owned a small percentage of stock of A; the owner
of remainder of A's stock had entered into a long-term lease of all its
properties, including A's stock, to C. C assigned the lease to taxpayer
who actually operated the business of A as a part of its own system.
Held, taxpayer's assignor was a closely affiliated interest through which
taxpayer controlled remainder of stock of A and taxpayer and A were
affiliated. Virginia Ry. & Power Co.

7. Id. Sales. Members of one family owned all of stock of A and
approximately two-thirds of stock of B. B was engaged in manufac-
turing tools and its entire output was sold under A's name, A controlling
its sales policy. Held, control of sales and production is not control of
stock and corporations were not affiliated. Heller Brothers Co...----

8. Id. Potential Control. Evidence that minority stockholders would
have given proxies to majority stockholders, if requested so to do, that
they were friendly toward majority stockholders, and that their stock was
held subject to agreement to give majority stockholders preference right
to purchase in event of sale, held insufficient to establish control of voting
rights of minority stock. J. K. Rishel Furniture Co....
II. OWNERSHIP OR CONTROL BY CORPORATIONS.

Control of Minority Stock. Taxpayer owned 61.23% of stock of one
company and 85.18% of the stock of a third; the minority stockholders
did not vote their stock, directly or through proxies, during taxable period,
but taxpayer voted all stock owned by it in both companies. Held, tax-
payer controlled a sufficient amount of minority stock of both companies
which, when added to its direct holdings, constituted ownership or control
of substantially all of the stock, and the three corporations were affiliated.
Virginia Ry. & Power Co-----

III. OWNERSHIP OR CONTROL BY SAME INTERESTS.

(1) Generally.

1. Same Interests. Ownership by a corporation of 54% of voting
stock of another and ownership by its stockholders of an additional 31%,
together with evidence of intercompany transactions, held to constitute
ownership by same interests. Pantlind Hotel Co....

(2) Percentage of Stock Ownership.

2. Mathematical Percentages. Certain individuals were officers, stock-
holders, and directors of A and B; 75% of stock of A and 33% of stock
of B was owned by them and their friends and business associates, and
27% of stock of B was owned by A. Both corporations were under
active control of such individuals and were operated as an economic unit,
and there were intercompany transactions. Held, the two corporations
were affiliated. Beaver Lumber Co....

3. Id. Ownership by a corporation is not ownership by its stock-
holders, and where three individuals, who own the majority of stock of A,
also own 75% of stock of B, the remainder of B's stock being owned by A,
such ownership is not ownership by the same interests. J. K. Kishel
Furniture Co. - - -

(3) Control of Minority Stock.
4. Quiescent Minority; Relatives. Two corporations were operated as
a business unit, with intercompany dealings, all the stock, with exception
of a small percentage owned by employees subject to restriction against
resale without first offering to sell to majority stockholders, being owned
by two families closely related, the head of one being the active manager
of both companies, controlling all policies, without question by minority
stockholders. Held, the two corporations were affiliated. Keeler Brass
Co.....

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127

468

1328

287

468

878

80

287

293