COMMISSIONER V. BOYLSTON MARKET ASS'N
131 F.2d 966 (1st Cir. 1942)
NATURE OF THE CASE: This was a dispute over the deduction of insurance premiums.
Commissioner (P) appealed a decision of the Board of Tax Appeals granting under Sections 23
and 42 of the Revenue Act of 1936, 49 Stat. 1648, taxpayer's deduction of the prepaid pro
rata portion of insurance applicable to each year.
FACTS: Boylston (D) was engaged in the management of real estate it owned. From time to
time it purchased fire and other insurance policies covering periods of more than three
years. Its books and records are kept on a cash receipts and disbursement basis. D, since
1915, has deducted each year as insurance expenses the amount of insurance premiums
applicable to carrying insurance for that year regardless of when the premium for that year
was paid. D took a deduction in the year in question of the prorated amount of insurance but
the IRS assessed deficiencies and allowed only the actual cash payments made in those years
instead of the prorated amounts.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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