- 3 -
1987 gross income.4 Respondent's cross-motion asks for an order
denying petitioner's motion in full and granting partial summary
judgment for respondent. Subsequent to the submissions of the
parties, we followed and applied Security Bank Minn. v.
Commissioner, supra, in Security State Bank v. Commissioner, 111
T.C. 210 (1998).
With respect to IFNB's consumer, commercial, and
agricultural short-term loans made to its customers, we follow
our decisions in Security Bank Minn. v. Commissioner, supra, and
Security State Bank v. Commissioner, supra, hold for petitioner,
grant petitioner's motion, and deny respondent's motion. By
reason of petitioner's concession, the interest that accrued on
such loans in 1986 is included in petitioner's income in full in
1987.
With respect to the certificates of deposit (CD's) and time
deposits owned by IFNB in 1986, we deny petitioner's motion and
respondent's cross-motion. Respondent's arguments with respect
to the CD's and time deposits raise questions of fact regarding
banking and commercial practices. These questions must be
4 Petitioner has conceded that it is not entitled to its
reporting position that the interest in issue that was received
in 1987 should be spread ratably over the 4 years 1987-90 as a
sec. 481 change in accounting method adjustment under sec.
448(d)(7), as enacted by the Tax Reform Act of 1986, Pub. L. 99-
514, sec. 801(a), 100 Stat. 2347 (TRA 1986). Sec. 448 requires C
corporations having average annual gross receipts of more than $5
million to switch to the accrual method of accounting for 1987
and later years.
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