- 33 - cures the payment of rent during the first 11.5 months of the lease in the amount of $8,872,245.00. It is incongruous for petitioner to argue that zero rent is allocated to the first 11.5 months of the lease when the letter of credit is clearly a provided-for substi- tute in the form of security for any rent that is not paid during this period in the amount of $8,872,245.00. Therefore, under the terms of the lease agreement, at least $8,872,245.00 is allocated to the lease term and must be accrued by petitioner in the first 11.5 months of the lease, if the Court finds that the parties to the lease should have followed the allocations made under the lease under I.R.C. � 467(b)(1)(A). In addition to being difficult to comprehend, the foregoing argument of respondent regarding the Partnership letter of credit is premised upon certain allegations of fact that are not estab- lished by the record herein. In this regard, it will be helpful to quote pertinent portions of the lease agreement. That agree- ment recited: 53. LETTER OF CREDIT. As security for the payment of Basic Rent, Lessee has delivered a letter of credit (herein, such letter of credit, and each extension or replacement thereof pursuant to this Section 53, is called the "Letter of Credit") in the aggregate amount equal to $8,872,245, with an expiry date of June 30, 1989, issued by Canadian Imperial Bank of Commerce ("CIBC") and Citicorp Real Estate, Inc., and with the Lessor * * * as beneficiary, which Letter of Credit may be assigned for collateral purposes by the Lessor to Canadian Imperial Bank of Commerce * * *. In addition to the foregoing, at least forty (40) days prior to the expiration of the first, second and third Lease Years (hereinafter defined), except to the extent that any prior Letter of Credit shall have been drawn up, Lessee shall likewise deliver to the benefi- ciary [Partnership] an extension of or replacement for the Letter of Credit in an aggregate amount * * * equal to the following * * *. * * * * * * *Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
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