- 5 - and, therefore, the projected income stream from the expansion of sewage capacity is irrelevant. The fact that Imperial used the cash to construct the main-line extension does not make the contribution equivalent to the asset constructed. We note that petitioner's reliance on the Staff of Joint Comm. on Taxation, General Explanation of the Tax Reform Act of 1986 (J. Comm. Print 1987), relating to section 118, is misplaced. [Id.]. In its motions to vacate and for reconsideration, petitioner argues that the findings with respect to its alternative argument are factually incorrect in that petitioner did not receive cash, but, rather, received a sewer line. Petitioner also argues that because its cost of the sewer line extension was greater than the amount of contributions by McArthy, it realized no income on the exchange. We shall grant petitioner's Motion for Reconsideration and reexamine this argument. Petitioner argues that the funds from the escrow account were never paid to petitioner, but, instead, were disbursed under the joint signatures of Fribis, as president of Imperial, and McArthy. Petitioner states that the escrow agreement prevented it from receiving cash. Based on a reexamination of the record, we agree that petitioner did not receive "cash" from the escrow account in the sense of a disbursement payable to petitioner. However, in light of the fact that the disbursements were only made under the signatures of Fribis and McArthy to pay entities to which Imperial was contractually bound, and the fact that Imperial is now the owner of the pipeline, we conclude that the reasoning in Epco, Inc. & Subs. v. Commissioner, supra, isPage: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011