- 12 - Section 1001(b) provides that "The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received." Petitioners argue that under section 1.1001-1(g)(2), Income Tax Regs., Four A was entitled to report the amount realized on the sale as the present value of the productions payments to be made under the agreement. In 1996, final regulations were issued providing a method for calculating the amount realized from a contingent payment debt instrument. Sec. 1.1001-1(g)(2), Income Tax Regs. Treasury Decision 8674, explaining the final regulations, provides in part: For a contingent payment debt instrument issued before August 13, 1996, a taxpayer may use any reasonable method to account for the debt instrument, including a method that would have been required under the proposed regulations when the debt instrument was issued. * * * [T.D. 8674, 1996-2 C.B. 84, 89.] The agreement for the sale of the equipment was executed in 1993, before the effective date of the 1996 regulations. Petitioners contend, as we understand it, that Four A received, in exchange for the equipment, a contingent payment debt instrument within the meaning of the regulations. Even if we 3(...continued) issue was not included in the statutory notices of deficiency or in the petitions. We find that the issue was tried by consent pursuant to Rule 41(b)(1), and we consider it to be before the Court.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011