26 CFR § 1.993-6 - Definition of gross receipts.
(iii) The sale at a gain of any property not described in subparagraph (1) of this paragraph, and
(1) The proceeds of a loan or of the repayment of a loan, or
(c) Nonreduction of total amounts. For purposes of paragraph (a) of this section, the total amounts received or accrued by a person are not reduced by returns and allowances, costs of goods sold, expenses, losses, a deduction for dividends received under section 243, or any other deductible amounts.
(d) Method of accounting. For purposes of paragraph (a) of this section, the total amounts received or accrued by a person shall be determined under the method of accounting used in computing its taxable income. If, for example, a DISC receives advance or installment payments for the sale or lease of property described in paragraph (a)(1) of this section, for the furnishing of services, or which represent recognized gain from the sale of property not described in paragraph (a)(1) of this section, any amount of such advance payments is considered to be gross receipts of the DISC for the taxable year for which such amount is included in the gross income of the DISC.
(e) Commission transactions.
(1) In the case of transactions which give rise to a commission on the sale or lease of property or the furnishing of services by a principal, the amount recognized by the commission agent as gross income from all such transactions shall be the gross receipts derived by the principal from the sale or lease of the property, or the gross income derived by the principal from the furnishing of services, with respect to which the commissions are derived. In the case of a commission agent for a related supplier (as defined in § 1.994-1(a)(3)(ii)), the gross receipts or gross income of such agent shall be determined as if it used the same method of accounting as its related supplier. In the case of a commission agent for a principal other than a related supplier, the gross receipts or gross income of such principal shall be determined as if such principal used the same method of accounting as its agent.
(2) If the commission arrangement provides that the commission agent will receive a commission only with respect to sales or leases of export property, or the furnishing of services, which result in qualified export receipts, the commission agent will not take into account the gross receipts or gross income, as the case may be, derived by the principal from any transaction for which the commission agent would not be entitled to a commission under the commission arrangement.
(f) Example. The provisions of this section may be illustrated by the following example:
|(1) N's sales receipts for machines manufactured by M (without reduction for cost of goods sold and selling expenses)||$1,500|
|(2) N's lease receipts for machines manufactured by M (without reduction for depreciation and leasing expenses)||500|
|(3) N's gross income from services for machines manufactured by M (without reduction for service expenses)||400|
|(4) Z's sale receipts for products manufactured by Z (without reduction for Z's cost of goods sold, commissions on sales, and commission sales expenses)||550|
|(5) Dividends received by N||150|
|(6) Interest received by N on producer's loans||200|
|(7) Proceeds received by N representing recognized gain (but not losses) from sales of business assets located outside the United States||250|
|(8) N's gross receipts||3,550|
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