SPRING CITY FOUNDRY CO. V. COMMISSIONER
292 U.S. 182 (1934)
NATURE OF THE CASE: This was a dispute over a write off of a bankrupt customer's account
for an accrual taxpayer.
FACTS: Spring (D) sold goods on credit to a customer. D was an accrual method taxpayer.
Before the end of the year, the customer went bankrupt and by the end of the year it was
clear that D would not be paid in full for the goods. D deducted a portion of the sale from
gross income as bad debt. This was disallowed. The IRS claimed that since the amount was
uncertain and that there were no provisions for partial write-offs, D could not claim the
deduction. D then took this lawsuit.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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