Tennessee Egg Co. v. COMMISSIONER OF INTERNAL REVENUE, Docket No. 109195.
| Decision Date | 18 August 1942 |
| Docket Number | Docket No. 109195. |
| Citation | 47 BTA 558 |
| Parties | TENNESSEE EGG CO., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT. |
| Court | U.S. Board of Tax Appeals |
Albert W. Taber, Esq., for the petitioner.
John R. Stivers, Esq., for the respondent.
This proceeding involves deficiencies in income and excess profits taxes for the fiscal year ended February 28, 1939, in the respective amounts of $776.68 and $427.47. The sole question presented for our consideration is whether losses sustained by virtue of certain transactions in egg futures are allowable in full as deductions or are subject to the capital loss limitations of section 117 of the Revenue Act of 1938.
FINDINGS OF FACT.
Petitioner, the Tennessee Egg Co., is a corporation, with its principal place of business located at Chattanooga, Tennessee. Its income and excess profits tax returns for the period here involved were filed with the collector of internal revenue for the district of Tennessee. Its books are kept and its tax returns filed on a fiscal year basis, the fiscal year commencing March 1. Petitioner's business is the purchase and sale for profit of poultry, eggs, butter, and cheese. Petitioner purchases from farmers, truckers, small and large dealers, and brokers and sells to jobbers, hotels, restaurants, grocery stores, and institutions.
During the taxable year ended February 28, 1939, petitioner entered into contracts with E. A. Pearce & Co. and Courts & Co., brokerage firms on the Chicago Mercantile Exchange, for the future delivery of approximately 24 carloads of eggs. Delivery was accepted on only 5 of these carloads, the remaining contracts being closed out without delivery. This resulted in certain losses being sustained by the petitioner, which losses are the center of this controversy. The total volume of petitioner's egg business in the taxable year was approximately 150 carloads.
The transactions during the taxable year involving egg futures contracts purchased and sold by petitioner through the two brokers mentioned above, and upon which no delivery of eggs was accepted, are as follows:
Through E. A. Pearce & Co
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| Purchase | | |
Amount | date | Sale date | Gain | Loss
-------------------------------------|----------|------------|----------|----------
2 cars _____________________________ | 9-15-38 | 9-19-38 | $145.60 | ________
2 cars _____________________________ | 10-29-38 | 12-31-38 | ________ | $964.40
1 car ______________________________ | 10-29-38 || | |
1 car ______________________________ | 11-16-38 | > 12-22-38 | ________ | 754.40
1 car ______________________________ | 11- 4-38 || | |
1 car ______________________________ | 10-31-38 | > 12-31-38 | ________ | 981.60
1 car ______________________________ | 11- 4-38 || | |
1 car ______________________________ | 12-10-38 | 12-29-38 | ________ | 17.20
1 car ______________________________ | 1-13-39 | 1-25-39 | ________ | 257.20
2 cars _____________________________ | 1-14-39 | 1-26-39 | ________ | 544.40
1 car ______________________________ | 1-13-39 | 1-26-39 | ________ | 212.20
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Through Courts & Co
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2 cars _____________________________ | 11-28-38 | 1-3-39 | ______ | $904.40
1 car ______________________________ |
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