- 7 -
property.3 Such being the case, petitioner's bonds are not
arbitrage bonds. Cf. California Health Facilities Authority v.
Commissioner, 90 T.C. 832, 843 (1988) (lending of bond proceeds
is not an "investment" with the result that such use does not
give rise to arbitrage).
Decision will be entered
for petitioner.
3 As the Court of Appeals for the District of Columbia
Circuit stated in City of Columbus v. Commissioner, 112 F.3d at
1205:
We also have no doubt that the 1994 transaction was a
"prepayment." But was the city's prepayment "for property"?
Only if it was may the prepayment itself be treated as
"investment-type property" under the regulation. * * *
Page: Previous 1 2 3 4 5 6 7
Last modified: May 25, 2011