International Multifoods Corporation and Affiliated Companies - Page 5

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          of Objection to Petitioner's Motion for Court to Decide Paty Loss           
          Issue, in which respondent contended that "It is in the interest            
          of judicial economy for the Court to continue to hold the PATY              
          stock loss issue in abeyance pending a further status report by             
          the respondent regarding the finalization of the stock loss                 
          regulations."  In a status report filed May 12, 1997, respondent            
          informed the Court that the proposed regulations were still not             
               We agree with petitioner that the time has come to decide              
          this issue.  In granting respondent's motion to sever, we relied,           
          in large part, upon respondent's statement that he was "hopeful"            
          that the proposed regulations would be finalized by the beginning           
          of 1997.  It is now over 10 years since the enactment of section            
          865(j)(1) directing the Secretary to promulgate regulations                 
          regarding this issue.  However, as of the date of issuance of               
          this opinion, the regulations still remain in proposed form.                
          Petitioner has already paid the deficiencies determined in the              
          notice of deficiency and is entitled to a decision on the merits.           

                                  FINDINGS OF FACT                                    

               Some of the facts have been stipulated and are so found.  At           
          the time its petition was filed, petitioner maintained its                  
          principal place of business in Minneapolis, Minnesota.  Damca               
          International Corp. (Damca) was a wholly owned subsidiary of                
          petitioner and joined in the filing of petitioner's consolidated            

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