- 8 -
was deductible as an expense in 1990. Petitioner explained that
the $793,753 deducted on the 1990 return was the amount of the
lease termination charge recorded on its books for financial
statement purposes, using capital lease accounting rules, but
that for Federal tax purposes petitioner was taking the position
that it was entitled to deduct the full termination charge of
$2.5 million for the taxable year in which it became legally
obligated to pay that amount.
A supplement to respondent’s response to petitioner's motion
for partial summary judgment partially alters respondent’s
position. Respondent now concedes that petitioner is entitled
"to an amortization deduction for one month in 1990, or to one-
sixtieth of the total $2.5 million rollover payment" because
petitioner is an accrual basis taxpayer, and because the
obligation to make the first monthly payment for the rollover
charge accrued on December 1, 1990.
Discussion
Summary judgment is intended to expedite litigation and
avoid unnecessary and expensive trials. Florida Peach Corp. v.
Commissioner, 90 T.C. 678, 681 (1988). Summary judgment is
appropriate where there is no genuine issue of material fact and
decision may be rendered as a matter of law. Rule 121(b);
Sundstrand Corp. v. Commissioner, 98 T.C. at 520; Jacklin v.
Commissioner, 79 T.C. 340, 344 (1982). In deciding whether to
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011