Page images
PDF
EPUB
[blocks in formation]
[blocks in formation]
[blocks in formation]

INDEX-DIGEST

Page

ACCOUNTING METHODS

Change of-Automobile Dealers Using Last-In, First-Out (LIFO) Inventory Method-Revaluation of Inventories Because of Accountant's Omission of Required Step.-Where petitioners reported income on 1997-99 income tax returns from group of automobile dealerships that had elected sec. 1361 S corporation treatment and reg. 1.472-8(e)(1) link-chain, dollar-value method for computing LIFO value of inventory; accountant employed by automotive group for election and following years omitted computational step required by reg. 1.472-8 in pricing LIFO inventories in dollar-value method; omission caused improper net increase in cost of goods sold and net reduction in gross income through end of year, but distortion from accountant's error did not result in permanent omission of any amount of gross income by any member; parties agreed Commissioner properly recalculated beginning and ending inventories of each member of group; Commissioner also made additional adjustment under sec. 481 for earliest open year of each member, which increased taxable income of member in that year to reflect cumulative adjustments to income; and petitioners challenged Commissioner's cumulative sec. 481 adjustments, Court determined, for first year in issue of each member, Commissioner's revaluation of member's inventory constituted change in member's method of accounting, and sec. 481 adjustments were permissible. Huffman v. Commissioner

Securities Trader's Failure To Elect Mark-to-Market Method on Return-Commissioner's Denial of Request for Extension of Time To File Election-Relief Exception.Where, on Apr. 17, 2000, petitioner securities trader requested extension of time to file 1999 income tax return that did not include sec. 475(f) election for mark-to-market method of accounting (entitling securities traders to treat gain or loss on sale or disposition of security as ordinary income or loss); on July 21, 2000, petitioner submitted election and request for relief under reg. 301.9100-3(c), and petitioner had not traded any securities or realized any further gains or losses between Apr. 17 and July 21; and Commissioner denied request pursuant to Rev. Proc. 99-17, sec. 5.03, in private letter ruling, contending petitioner was required to file election by Apr. 17, and subsequently determined deficiencies for petitioner's taxable years 1999-2000, Court determined (1) petitioner was entitled to extension of time to file sec. 475(f) election pursuant to reg.

322

« PreviousContinue »