- 30 -
C.B. 736, apply to hospitals as well as to other types of
business. That interpretation, petitioners contend, is
inconsistent with the statutory language and its legislative
history and is not required by the literal language of the
regulations. We find petitioners' reading of the regulation too
broad.
Petitioners appear to base their position in part on the
following language contained in H. Conf. Rept. 99-841 (Vol. 2),
at II-288 (1988), 1986-3 C.B. (Vol. 4) 1, 288: "The conferees
intend that the timing of the section 481 adjustment other than
for a hospital will be determined under the provisions of Rev.
Proc. 84-74, 1984-2 C.B. 736." Rev. Proc. 84-74, 1984-2 C.B.
13 (...continued)
section 481(a) adjustment relates, the acquiring taxpayer
shall continue to take into account the section 481(a)
adjustment as if it were the distributor or transferor
taxpayer. [Sec. 1.448-1T(g)(3)(iii), Temporary Income Tax
Regs., 52 Fed. Reg. 22772-22773 (June 16, 1987).]
In their brief, however, petitioners quote the final regulations
in discussing the cessation-of-business acceleration provision.
Based on the quoted language and the substance of their
arguments, it is clear to the Court that petitioners utilized the
final regulations in formulating their arguments relating to the
cessation-of-business acceleration provision. We agree that the
final regulations are applicable in the instant case and,
therefore, we restrict our discussion to those regulations.
Nonetheless, for purposes of the specific issue before the Court,
our conclusion that petitioners must include in income for 1987
all of the sec. 481(a) adjustments relating to the Category B
Corporations would be the same had we relied on the cessation-of-
business provision as it was defined in the temporary
regulations.
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011