1942)[1] was a taxation case decided by the United States Court of Appeals for the First Circuit.

The cash method taxpayer had a business in which he owned and managed real estate.

1938),[2] the First Circuit allowed a cash method taxpayer to make a full deduction of insurance premiums in the year he paid them as an ordinary and necessary business expense, despite the fact that the insurance covered a three-year period.

To permit the taxpayer to take a full deduction in the year of payment would distort his income.

We therefore overrule Welch v. De Blois and hold that prepaid insurance deductions must be allocable over the time period for which the policy covers.