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constructing the Atrium under sec. 165(a), I.R.C.
Held: P may not allocate the cost of constructing the
Atrium to the bases of the adjoining properties because
the basic purpose of the Atrium was not the enhancement
of the adjoining properties so as to induce sales of
those properties. The basic purpose test enunciated in
Estate of Collins v. Commissioner, 31 T.C. 238 (1958),
and subsequent cases, is applicable, but the Atrium
does not qualify under that test. Held, further, P has
failed to establish a loss equal to the cost of
constructing the Atrium pursuant to sec. 1.165-1(b) and
(d)(1), Income Tax Regs., and, therefore, is not
entitled to a deduction under sec. 165(a), I.R.C.
II.
Pursuant to various agreements (the 1988 Atrium
Transaction), a member of the UBC affiliated group
(LBC) sold an undivided 48-percent interest in the
Atrium and certain related property, and another member
of the UBC affiliated group (UBD) agreed to lease the
Atrium and certain related property from LBC and
another party. The UBC affiliated group reported the
1988 Atrium Transaction as a sale and leaseback for
Federal income tax purposes. Held: P may not disavow
the form of the 1988 Atrium Transaction.
III.
P claims that it is entitled to calculate the
corporate minimum tax for the UBC affiliated group's
1977, 1980, 1984, and 1985 taxable years on a separate
return basis and claims refunds for those years on that
basis. Held: The regular tax deduction under sec.
56(c), I.R.C., for an affiliated group of corporations
is limited to the amount of tax imposed on the group
under chapter one of subtitle A (without regard to the
corporate minimum tax and certain other provisions and
reduced by the sum of certain credits) and, therefore,
P's refund claim is denied.
IV.
P claims that certain furniture and fixtures
placed in service by various members of the UBC
affiliated group during the group’s 1987 through 1989
taxable years, which are described in both asset
guideline classes 57.0 (Distributive Trades and
Services) and 00.11 (Office Furniture, Fixtures, and
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