U.S. Bancorp, Successor In Interest to West One Bancorp and Subsidiaries, formerly known as Moore Financial Group, Inc. - Page 11

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          the accrual of interest--or the accrual of any interest                     
          substitute such as OID--on the loans and other assets at issue in           
          this case.                                                                  
               Respondent, on the other hand, advances three arguments to             
          support the determination that the short-term obligation rules do           
               First, respondent asserts that our decision in Security Bank           
          Minn. v. Commissioner, supra, was wrong and that we should                  
          overrule it in this case.                                                   
               Second, respondent asserts that the obligations in this case           
          were issued with OID--an assertion respondent expressly declined            
          to make with respect to the loans at issue in Security Bank Minn.           
          v. Commissioner, supra.  Respondent argues that because the                 
          Court, in Security Bank Minn., therefore assumed that the loans             
          at issue were not discount loans, this distinction compels (or at           
          least permits) a different tax result in this case from the                 
          result we decided on in Security Bank Minn, with respect to the             
          assertedly nondiscount loans there at issue.                                
               Third and finally, respondent asserts that the time deposits           
          and CD's at issue in this case are different, in legally                    
          significant respects other than their "discount" status, from the           
          bank loans at issue in Security Bank Minn. v. Commissioner,                 
          supra--and that this difference compels a different tax result              
          with respect to the time deposits and CD's.                                 

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