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(D) compensation, however designated, for
the use of, or the right to use, any tangible
personal property manufactured or produced by the
taxpayer, if during the taxable year the taxpayer
is engaged in substantial manufacturing or
production of tangible personal property of the
same type, or
(E) active business computer software
royalties (as defined in subsection (d)).
Based upon the above, the narrow question at issue in
this case is whether the interest income received by
petitioner in connection with the purchase money
obligations taken to facilitate its sale of real properties
is included in the term "rents" as defined by section
543(b)(3). This depends upon whether the purchase money
obligations on which the interest was paid are "debts"
which represent "the price for which real property held
primarily for sale to customers in the ordinary course of
its trade or business was sold or exchanged by the
corporation". Sec. 543(b)(3).
The language of section 543(b)(3), "property held
primarily for sale to customers in the ordinary course of
its trade or business", is nearly identical to the language
of section 1221(1). Accordingly, this and other courts
have used the cases decided under section 1221(1) for
guidance in deciding whether section 543(b)(3) applied.
See Kent Indus. Corp. v. Commissioner, 25 T.C. 215, 219
(1955). The same should also be true of the cases under
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