Payless Cashways, Inc. and Its Subsidiaries - Page 1

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                                   114 T.C. No. 3                                     



                               UNITED STATES TAX COURT                                


            PAYLESS CASHWAYS, INC., AND ITS SUBSIDIARIES, Petitioners v.              
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      


               Docket No. 26342-95.          Filed February 16, 2000.                 


                    P equipped and furnished 5 of 11 floors of a                      
               building it leased for its corporate headquarters.  The                
               owner of the building was a limited partnership (TPS)                  
               in which P had a 16-2/3-percent interest.  TPS signed a                
               contract for the construction of the building on Apr.                  
               4, 1985.  P took possession of the leased space in                     
               October 1986.                                                          
                    P claimed an investment tax credit for its taxable                
               year ending Nov. 29, 1986, for the cost of the                         
               equipment and furnishings acquired and placed in                       
               service at P’s corporate headquarters.  R disallowed                   
               the claimed credits.                                                   
                    The Tax Reform Act of 1986 (TRA), Pub. L. 99-514,                 
               100 Stat. 2085, generally repealed the investment                      
               credit for property acquired or placed in service after                
               Dec. 31, 1985.  However, P’s claim for investment tax