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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