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section 481(a) adjustment relating to the division's trade or
business. Rev. Proc. 87-55, sec. 4.05(1), 1987-2 C.B. 671, 673;
see also Rev. Rul. 80-39, 1980-1 C.B. 112 (a corporation seeking
permission to change its method of accounting for one of its
divisions must agree to include the balance of the related
section 481(a) adjustment in income for the year in which the
division ceases to engage in that trade or business). In the
instant case, petitioners stipulated that each Category B
Corporation was a separate enterprise with a separate trade or
business and kept separate books and records. The assets of
those Category B Corporations consisted of those Facilities owned
and operated by the New Parents that HealthTrust wanted to
acquire. The Facilities were separate trades or businesses of
the New Parents. Indeed, 40 percent of the hospitals were the
only hospitals for the communities they served, and 20 percent of
the remaining hospitals were one of two hospitals for the
communities they served. The New Parents ceased to engage in
those trades or businesses when the Facilities were transferred
to the Category B Corporations and sold to HealthTrust.
Consequently, although the New Parents continued to own and
operate other hospitals, office buildings, or medical facilities,
they did not continue the business of those Facilities which had
been spun off to the Category B Corporations. Requiring the New
Parents to include in income the portion of the section 481(a)
adjustment attributable to the Category B Corporation for the
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