BROWN SHOE CO., INC. V. COMMISSIONER, 339 U. S. 583 (1950)

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U.S. Supreme Court

Brown Shoe Co., Inc. v. Commissioner, 339 U.S. 583 (1950)

Brown Shoe Co., Inc. v. Commissioner of Internal Revenue

No. 445

Argued April 5, 1950

Decided May 15, 1950

339 U.S. 583


Petitioner corporation received cash and other property from certain community groups as inducements to the location or expansion of petitioner's manufacturing operations in the communities. The cash so received (which was less than the amounts expended for local factory buildings and equipment) was not earmarked or segregated, but was deposited in petitioner's general bank account. The values of buildings so received were charged to a building account. Both cash and other property so received were credited to surplus.

Held: in determining petitioner's excess profits tax, computed by the invested capital method, for the fiscal years ended 1942 and 1943:

1. Under § 113(a)(8)(B) of the Internal Revenue Code, petitioner was entitled to deductions on account of depreciation on property acquired from community groups or acquired with cash received from such groups, to the extent that the property was acquired after December 31, 1920. Detroit Edison Co. v. Commissioner, 319 U. S. 98, distinguished. Pp. 339 U. S. 589-591.

2. Under § 718(a)(1) and (2) of the Internal Revenue Code, petitioner may also include the value of such contributions from community groups in equity invested capital. LaBelle Iron Works v. United States, 256 U. S. 377, distinguished. Pp. 339 U. S. 592-593.

175 F.2d 305, reversed.

The case is stated in the first paragraph of the opinion. The decision below is reversed, p. 339 U. S. 593.

Page 339 U. S. 584

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