Massey Motors, Inc. v. United States
| Decision Date | 18 October 1962 |
| Docket Number | Civ. No. 3346-J. |
| Parties | MASSEY MOTORS, INC., Plaintiff, v. UNITED STATES of America, Defendant. |
| Court | U.S. District Court — Southern District of Florida |
Hill & Frazier, Jacksonville, Fla., for plaintiff.
Edward F. Boardman, U. S. Atty., and Barnard J. Schoenberg, Trial Atty., Tax Division, Dept. of Justice, Washington, D. C., for Government.
This suit for the recovery of corporate income taxes and interest thereon was originally before this Court as reported in Massey Motors, Inc. v. U. S., 156 F. Supp. 516 (S.D.Fla.1957); the facts of the case are fully set forth in the opinion therein reported and it would be superfluous to restate them here. The District Court having originally found for the plaintiff taxpayer, the Government successfully appealed as reported in U. S. v. Massey Motors, Inc., 264 F.2d 552 (5 C.C.A.1959). The Fifth Circuit's decision that depreciation of automobiles must be computed on the useful life of the asset to the taxpayer rather than the useful life of the depreciable asset was appealed unsuccessfully to the Supreme Court of the United States, as reported in Massey Motors, Inc. v. U. S., 364 U.S. 92, 80 S.Ct. 1411, 4 L.Ed.2d 1592 (1960).
Pursuant to the directions in the Fifth Circuit's opinion, supra, this case returns to this Court for a finding of the salvage values of the automobiles on which depreciation was taken. It is admitted that the automobiles in question normally are sold by the taxpayer for more than their cost to taxpayer. As set forth in the Pre-Trial Stipulation, signed by counsel for both parties hereto, the sole issue remaining in this controversy is "whether the salvage value of the company cars should be deemed to be the retail value thereof, or whether the salvage value of said cars should be the wholesale value".
In this case the Supreme Court stated (364 U.S. at p. 93, 80 S.Ct. at p. 1413, 4 L.Ed.2d 1592):
"We have concluded that the reasonable allowance for depreciation of the property in question used in the taxpayer's business is to be calculated over the estimated useful life of the asset while actually employed by the taxpayer, applying a depreciation base of the cost of the property to the taxpayer less its resale value at the estimated time of disposal." (Emphasis added)
The Pre-Trial Stipulation provides that the parties are in agreement that the estimated time of disposal would be one year or less; the record in this case clearly shows, and this Court so finds, that the automobiles were sold by...
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