United States Supreme Court Cases & Opinions

U.S. Supreme Court

American National Co. v United States, 274 U.S. 99 (1927)

American National Co. v United States

No. 167

Argued February 25, 1927

Decided April 11, 1927

274 U.S. 99

Syllabus

A corporation, in the business of making and selling loans on five year notes and mortgages, derived its income from commissions in the form of two year notes made by the borrowers, and, in selling loan notes to investors, agreed, as an inducement, to pay them bonuses of a specified percent yearly of the loans sold, during the life thereof. Held that, under § 13(d) of the Revenue Act of 1916, and regulations of the Treasury pursuant thereto, a method of accounting which accrued the aggregate of the commission notes received during a tax year as income thereof, though not then due and payable, and which similarly accrued the aggregate of bonus contracts made during the year as expenses thereof, correctly reflected the income, and that such aggregate of bonus contracts was properly deducted from the gross of the commissions in ascertaining taxable income. United States v. Anderson, 269 U. S. 422. P. 274 U. S. 103.

Reversed.

Appeal from a judgment of the district court in favor of the United States in a suit under the Claims Act (Jud.Code

Page 274 U. S. 100

§ 24, par. 20) to recover an amount paid under protest as an income and excess profits tax.