- 5 -
in 1981. During the years in issue, 1986 through 1988, Moore
Financial was the parent corporation of IFNB.5
In 1986, IFNB was a "bank", as defined in section 581, that
was entitled to and did use the cash method of accounting for
Federal income tax purposes.6
Also during 1986, IFNB was the largest commercial and
agricultural lender in Idaho. As a large commercial bank, IFNB
made numerous loans of different maturities in the ordinary
course of its business, including loans of less than 1 year, 1-
year loans, and loans of more than 1 year.
The short-term obligations in issue here all had periods to
maturity of 1 year or less and consisted of the following:
Principal Accrued Interest
Description Balances as of 12/31/86
Time deposits with banks 1$164,000,000 1$970,214
CD's with banks 243,000,000 22,373,410
Consumer loans 16,626,503 381,325
Commercial and
agricultural loans 3356,888,213 36,092,248
Total 4580,514,716 49,817,197
5 After the years at issue (in 1989) Moore Financial changed
its name to West One Bancorp (West One). In 1995, West One
merged into U.S. Bancorp (Old Bancorp). In 1997, Old Bancorp
merged into First Bank System, Inc., a bank holding company,
which changed its name to U.S. Bancorp (the petitioner in this
case).
6 IFNB switched to the accrual method of accounting for
1987, as required by sec. 448, enacted by TRA 1986. See supra
note 4.
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