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"Land Development Costs" of $13,800,857, $13,830,400, and
$11,481,780, respectively.
Petitioner, on originally filed returns, claimed the
following amounts of interest as deductions related to its
effectively connected income (ECI) from the conduct of a trade or
business in the United States:
Fiscal Year
Ended Interest Deducted
9/30/89 $887,324
9/30/90 1,837,751
9/30/91 1,346,795
On its original income tax returns for the taxable years
1989 through 1991, petitioner reported that it had no excess
interest tax liability by means of the following reported
information:
Fiscal Year
Ended Excess Interest Computed
9/30/89 Designated as N/A
9/30/90 $1,837,751 - $1,837,751 = None
9/30/91 $1,346,795 - $1,346,795 = None
Petitioner, for the years 1989 through 1991, withheld and
paid tax to respondent in an amount equivalent to 10 percent of
the interest paid to third-party foreign banks (Mitsubishi Trust
and Bank of Tokyo), in accordance with the applicable 10-percent
withholding rate under the United States-Japan Income Tax Treaty
(the treaty) as follows:
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