El Charro TV Rental, Inc., Diana L. Peters, Tax Matters Person - Page 11

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          by the holding in El Charro I as determined by the Court of                 
          Appeals for the Fifth Circuit.  By affirming the Tax Court’s                
          decision, the Court of Appeals has confirmed (determined) that              
          the income forecast method for depreciation is not a proper                 
          method for depreciating the rental units inventory.  There is no            
          ambiguity in the parties’ agreement or the El Charro I opinion.             
               El Charro is in a paradoxical situation because it may                 
          experience a result different from the taxpayers whose cases were           
          appealed to the Court of Appeals for the Tenth Circuit and                  
          because it may have had the right to appeal to the Court of                 
          Appeals for the Tenth Circuit.  El Charro was incorporated in               
          Texas and alleged that its principal place of business is in                
          Kansas.  El Charro’s lot was chosen by reaching an agreement with           
          respondent to be bound by the outcome of the appeal to the Fifth            
          Circuit.  That choice cannot now be retracted because a more                
          favorable result might occur for El Charro.  In order to maintain           
          the finality of parties’ agreements to resolve cases, it is                 
          necessary to enforce the parties’ agreement here.                           
               To reflect the foregoing,                                              
                                             Respondent's motion for entry            
                                        of decision will be granted, and              
                                        decision will be entered in accord            
                                        with the parties’ agreement.                  

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Last modified: May 25, 2011