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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
apply.
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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