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deductions for the amount of costs and fees it paid or
incurred that are properly allocable to indebtedness
and amortized over the term of such indebtedness.
James L. Malone III, Kristen E. Hazel, and Lonn W. Myers,
for petitioner.
Lawrence C. Letkewicz, William E. Bogner, and Dana E.P.
Hundrieser, for respondent.
SUPPLEMENTAL OPINION
RUWE, Judge: On August 24, 1994, we issued an opinion that
resolved some, but not all, of the issues in this case. Fort
Howard Corp. v. Commissioner, 103 T.C. 345 (1994). The parties
have now settled the remaining issues.
One of the issues resolved in our prior opinion was whether
section 162(k)1 precluded petitioner from deducting or amortizing
the costs and fees, other than interest, that petitioner paid in
1988 to borrow funds used in the leveraged buyout (LBO) of its
stock. We held that such costs and fees were paid or incurred
"in connection with" a redemption and that section 162(k)
precluded petitioner from deducting or amortizing them for
purposes of computing its taxable income.
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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