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legislature. Petitioner's principal business is the operation of
a futures exchange. Petitioner owns and manages the commercial
office building (CBOT building) that houses its exchange
facilities. The bulk of the space in the CBOT building,
approximately 80-85 percent, is leased to third-party tenants.
The CBOT building is the largest asset shown on petitioner's
balance sheet. Petitioner's management believes that the current
fair market value of the CBOT building is between $350 and $400
million. The CBOT building consists of the original landmark
building constructed in the 1930's, a new trading floor that
petitioner constructed in the early 1970's, and an adjacent 22-
story commercial building that petitioner constructed in the
early 1980's at a cost of between $110 and $120 million.
Petitioner's borrowings to finance these acquisitions are
represented by one consolidated and extended mortgage debt
secured by the CBOT building.
During the years in issue, the mortgage debt encumbering the
CBOT building represented petitioner's single largest liability.
The amounts of the mortgage debt as of December 31, 1988, 1989,
and 1990 were $33,315,792, $30,695,564, and $27,793,779,
respectively. Petitioner made payments of principal and interest
on the mortgage debt in the total amount of $5,914,269 in each of
the years in issue.
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