Taiyo Hawaii Company, Ltd. - Page 2

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                    Held:  The advances were debt, and P is subject to                
               the sec. 884 excess interest tax provisions.  Held,                    
               further, sec. 884 and regulations interpreted--excess                  
               interest tax provisions apply.  Held, further, the                     
               questioned assets are includable in the excess interest                
               tax computation.                                                       

               Michael Rosenthal and Thomas E. Busch, for petitioner.                 
               Jonathan J. Ono, for respondent.                                       

               GERBER, Judge:  For the taxable years ended September 30,              
          1989, 1990, and 1991,1 respondent determined deficiencies in                
          petitioner's Federal income taxes in the amounts of $35,529,                
          $71,692, and $84,331, respectively.  Respondent also determined             
          an $8,433 addition to tax under section 6651(a)(1)2 for 1991.               
               The issues for our consideration are:  (1) Whether                     
          petitioner is liable for excess interest tax under section                  
          884(f)(1)(B) for 1989, 1990, and 1991; (2) if petitioner is                 
          liable for the excess interest tax, whether certain assets should           
          be included in the taxable base; and (3) whether petitioner is              
          liable under section 6651(a)(1) for failure to timely file a                
          return for 1991.                                                            

               1  All taxable years shown in this opinion, although                   
          expressed simply as years, refer to taxable years ended Sept. 30            
          of the referenced year.                                                     
               2  Unless otherwise indicated, section references are to the           
          Internal Revenue Code in effect for the period under                        
          consideration.  Rule references are to this Court's Rules of                
          Practice and Procedure.                                                     

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