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Thor Power Tool Co. v. Commissioner

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In court, the company argued that its deduction for loss should be allowed for tax purposes because it was permitted for accounting purposes. But the Court upheld the IRS regulations, saying, "There is no presumption that an inventory practice conformable to
241:" method for tax purposes only if the taxpayer could demonstrate a reduced market price, or the goods were defective or "subnormal". It did not permit companies to write down goods simply because they were not selling them. 229:
manufactured equipment using multiple parts that it produced. It capitalized the costs of these parts when produced. When it had inventories of parts in excess of production needs, the company's accounting practice was to
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The Commissioner did not abuse his discretion in determining that the write-down of "excess" inventory failed to reflect petitioner's 1964 income clearly, since the write-down was plainly inconsistent with the governing
17: 249:' is valid for tax purposes. Such a presumption is insupportable in light of the statute, this Court's past decisions, and the differing objectives of tax and financial accounting." 395: 265:
in order to realize a taxable loss. These books would previously have been kept in stock but written down to reflect the fact that not all of them were expected to sell.
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decision caused publishers and booksellers to be much quicker to destroy stocks of
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those inventories, taking a loss based on management judgment.
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regulations limiting how taxpayers could write down inventory.
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Thor Power Tool Company v. Commissioner of Internal Revenue
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Thor Power Tool Company v. Commissioner of Internal Revenue
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United States Supreme Court cases of the Burger Court
382: 406:United States taxation and revenue case law 304:"How Thor Power Hammered Publishing - SFWA" 247:generally accepted accounting principles 237:However, IRS regulations accepted this " 212:Thor Power Tool Company v. Commissioner 35:Thor Power Tool Company v. Commissioner 14: 383: 29:1979 United States Supreme Court case 322:Thor Power Tool Co. v. Commissioner 24: 47:Supreme Court of the United States 25: 417: 401:United States Supreme Court cases 332:522 (1979) is available from: 314: 40: 219:case in which the Court upheld 391:1979 in United States case law 296: 275: 13: 1: 268: 215:, 439 U.S. 522 (1979), was a 7: 217:United States Supreme Court 10: 422: 252: 201: 196: 185: 180: 114: 109: 103: 98: 70: 60: 53: 39: 34: 56:Decided January 16, 1979 239:lower of cost or market 54:Argued November 1, 1978 129:William J. Brennan Jr. 281:Pratt & Kulsrud, 203:Internal Revenue Code 263:poorly-selling books 189:Blackmun, joined by 373:Library of Congress 285:, 2006, p. 10-33. 161:Lewis F. Powell Jr. 125:Associate Justices 291:978-0-7593-5175-2 208: 207: 165:William Rehnquist 149:Thurgood Marshall 89:99 S.Ct. 773; 58 16:(Redirected from 413: 377: 371: 368: 362: 359: 353: 350: 344: 341: 335: 308: 307: 300: 294: 283:Federal Taxation 279: 121:Warren E. Burger 110:Court membership 44: 43: 32: 31: 21: 421: 420: 416: 415: 414: 412: 411: 410: 381: 380: 375: 369: 366: 360: 357: 351: 348: 342: 339: 333: 317: 312: 311: 302: 301: 297: 280: 276: 271: 255: 173:John P. Stevens 163: 151: 139: 94: 55: 49: 30: 23: 22: 15: 12: 11: 5: 419: 409: 408: 403: 398: 393: 379: 378: 355:Google Scholar 316: 315:External links 313: 310: 309: 295: 273: 272: 270: 267: 254: 251: 206: 205: 199: 198: 194: 193: 187: 183: 182: 178: 177: 176: 175: 153:Harry Blackmun 137:Potter Stewart 126: 123: 118: 112: 111: 107: 106: 101: 100: 96: 95: 88: 72: 68: 67: 62: 61:Full case name 58: 57: 51: 50: 45: 37: 36: 28: 9: 6: 4: 3: 2: 418: 407: 404: 402: 399: 397: 394: 392: 389: 388: 386: 374: 365: 356: 347: 338: 337:CourtListener 331: 327: 323: 319: 318: 305: 299: 292: 288: 284: 278: 274: 266: 264: 260: 250: 248: 242: 240: 235: 233: 228: 224: 222: 218: 214: 213: 204: 200: 195: 192: 188: 184: 179: 174: 170: 166: 162: 158: 154: 150: 146: 142: 138: 134: 130: 127: 124: 122: 119: 117:Chief Justice 116: 115: 113: 108: 102: 97: 92: 86: 85: 80: 77: 73: 69: 66: 63: 59: 52: 48: 38: 33: 27: 19: 321: 298: 282: 277: 258: 256: 243: 236: 225: 211: 210: 209: 197:Laws applied 190: 181:Case opinion 168: 156: 144: 132: 105:Regulations. 82: 64: 26: 141:Byron White 385:Categories 269:References 232:write down 191:unanimous 91:L. Ed. 2d 71:Citations 320:Text of 186:Majority 346:Findlaw 253:Effects 99:Holding 376:  370:  367:  364:Justia 361:  358:  352:  349:  343:  340:  334:  289:  171: 169:· 167:  159: 157:· 155:  147: 145:· 143:  135: 133:· 131:  328: 330:U.S. 287:ISBN 259:Thor 257:The 227:Thor 84:more 76:U.S. 74:439 326:439 221:IRS 93:785 79:522 387:: 324:, 306:. 293:. 245:' 87:) 81:( 20:)

Index

Thor Power Tool Company v. Commissioner of Internal Revenue
Supreme Court of the United States
U.S.
522
more
L. Ed. 2d
Warren E. Burger
William J. Brennan Jr.
Potter Stewart
Byron White
Thurgood Marshall
Harry Blackmun
Lewis F. Powell Jr.
William Rehnquist
John P. Stevens
Internal Revenue Code
United States Supreme Court
IRS
Thor
write down
lower of cost or market
generally accepted accounting principles
poorly-selling books
ISBN
978-0-7593-5175-2
"How Thor Power Hammered Publishing - SFWA"
439
U.S.
CourtListener
Findlaw

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