Consolidated Manufacturing, Inc., M. P. Long Living Trust, Merl Philip Long, Trustee, Tax Matters Person - Page 79

                                        -79-                                          
          record in the present case.  For example, the Court of Appeals              
          for the Tenth Circuit stated that the item two charge "was                  
          purposely made higher than the value of the old core to be                  
          returned, in order to induce customers to return old cores and to           
          enable Burrell to maintain a needed inventory of old cores."  Id.           
          at 683.  It is not clear what the Court of Appeals meant by the             
          term "value".  In any event, in the instant case, we have found             
          on the record presented to us that Consolidated determined the              
          price that it was willing to pay to acquire customer cores on the           
          basis of market-related factors, including supply and demand, and           
          that it did not pay more to acquire customer cores than the                 
          marketplace in which it acquired those cores demanded.  The Court           
          in Burrell v. Commissioner, supra at 683, also indicated that the           
          taxpayers' books reflected an account called "Customer Core                 
          Deposits" which "reflected the amounts of Item Two charges which            
          customers would have to pay in cash if they failed to discharge             
          them by the return of an old core."  In the present case, we have           
          found that at the time of each sale of a remanufactured auto-               
          mobile part the core amount, which was part of the remanufactured           
          automobile part sales price for each such sale, was reflected in            
          Consolidated's books as an entry increasing "sales (core amount)"           
          and as part of an entry (i.e., the remanufactured automobile part           
          sales price) increasing "customer account receivable"; the core             
          amount was not shown in those books as a deposit.                           






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