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2. The Star Markets Plan
Star Markets included both the yearend accumulated and
nonaccumulated benefits in calculating its claimed vacation pay
accruals under section 463 for TYE 8701 and TYE 8801. Respondent
disputes petitioner's inclusion of the yearend nonaccumulated
benefits in its calculation of accruals under section 463.
Respondent claims she did not consider inappropriate factors such
as whether the vacation benefits were vested, nonvested,
contingent, or subject to conditions subsequent or precedent in
making her adjustments.
We are convinced that respondent properly focused solely on
whether the vacation pay was earned pursuant to section 463.
Respondent allowed petitioner a deduction based on three-fourths
of the unpaid yearend vacation benefits (May 1 through January 30
or 31), disallowing only the nonaccumulated benefits (January 30
or 31 to April 30), even though none of the benefits vested until
May 1, and employees could not take any leave before their
service requirements were met for the entire year.
3. The Acme Markets Plans
By the end of TYE 8701 and TYE 8801, employees covered by
the Acme Markets Plans would have vested in three-quarters of the
vacation benefits they anticipated receiving in the subsequent
taxable year. The remaining one-quarter of Acme Markets Plans
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