ABKCO Industries, Inc., 56 T.C. 1083 Aff'd 482 F.2d 150 (3rd Cir 1973)
Proper year of deduction of contingent royalty payments. Contractual liabilities were contingent and not deductible to an accrual method taxpayer until such contingencies were removed.
Ingram v. Bowers, 47 F2d 925 (S.D.N.Y. 1931). Aff'd. 57 F2d 65 (2d Cir. 1932)
Held that royalties paid under recording contract were compensation for services.
Restore, Inc., Petitioner v. Comm. TCM 1997-571
Royalty fees accruing were based on net sales of product. Payment of royalties were contingent upon positive cash flow.
Times Publishing Co. v. Comm., 13 TC 329 (1949), Aff'd per curiam 184 F. 2d 376 (3rd Cir 1950)
Payor is denied any deduction for the amount of the accrued deferred compensation until the taxable year in which the employee includes the amount in the employees income for tax purposes.
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