U.S. Bancorp, Successor In Interest to West One Bancorp and Subsidiaries, formerly known as Moore Financial Group, Inc. - Page 3

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          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            
               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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