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for GENDYN in the amounts of $26,118,976 and $291,218,973 for its
1985 and 1986 taxable years, respectively. With respect to
GENDYN/FSC, respondent determined a $586,533 corporate income tax
deficiency for its 1986 taxable year. Although these cases are
consolidated and related, for purposes of briefing and opinion
the issues have been divided into two generalized categories:
Domestic and foreign. This opinion addresses the foreign issues.
The parties have settled some of the foreign issues, and the
following controversies remain for our consideration and
decision: (1) Whether in computing combined taxable income
attributable to qualified export receipts under sections 9941 and
925 petitioners must, in addition to current year period costs,
deduct prior year period costs, as determined by respondent; and
(2) whether two liquefied natural gas tankers manufactured by
petitioner and sold to an unrelated third party for foreign use
constitute export property under section 993(c)(1) even though no
foreign use occurred during the first year and/or domestic use
occurred on one occasion prior to any foreign use.
FINDINGS OF FACT
The parties have stipulated most of the facts bearing on the
foreign issues, and those facts are found and incorporated by
this reference. GENDYN was incorporated on February 21, 1952,
1 Unless otherwise indicated, section references are to the
Internal Revenue Code as amended and in effect for the taxable
years in issue.
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