Affiliated Foods, Inc. - Page 2

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          distribution to petitioner's member stores at petitioner's food             
          shows is includable in petitioner's income.  We hold it is.  (3)            
          Whether petitioner is entitled to a deduction under section 162             
          for certain amounts received from Western Family Foods (Western)            
          and distributed to its member stores at its 1989 and 1990 food              
          shows.  We hold it is.1                                                     
               All subchapter and section references are to the Internal              
          Revenue Code in effect for the taxable years in issue, and all              
          Rule references are to the Tax Court Rules of Practice and                  
          Procedure, unless otherwise indicated.  All dollar amounts are              
          rounded to the nearest dollar.                                              
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated.  The stipulated                
          facts and the accompanying exhibits are incorporated into our               
          findings by this reference.  At the time the petition in this               
          case was filed, petitioner's principal place of business was                
          located in Amarillo, Texas.  Petitioner keeps its books and                 
          records on the accrual method of accounting, and it files its               
          Federal income tax return using a fiscal year ending September              
               Petitioner is a wholesale food purchasing cooperative that             
          supplies food and other consumer products to retail grocery                 

          1    Respondent also determined that petitioner was entitled to             
          an increased environmental tax deduction for 1990.  This is a               
          mathematical adjustment.                                                    

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Last modified: May 25, 2011