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periods, had the contract drilling economy improved, it could
have used its rigs as a contract driller.
We have determined that CDC was in the contract drilling
business prior to the change of ownership. Therefore, to be
entitled to deduct the NOL's, it follows that CDC must have
continued in the contract drilling business after the change of
ownership. In H.F. Ramsey Co. v. Commissioner, 43 T.C. at 514,
we reviewed the legislative history of section 382 and concluded
that “it would appear that there has to be a real change in the
type of business conducted to come within * * * [the] statute.”
Accord Clarksdale Rubber Co. v. Commissioner, 45 T.C. 234 (1965);
Goodwyn Crockery Co. v. Commissioner, supra. Both before and
after the acquisition, CDC's operations are best described as a
contract drilling operation.
The facts in the record indicate that had CDC been in the
business of buying and selling rigs, as respondent contends, CDC
would have operated in a substantially different manner. After
the change of ownership, CDC continued to maintain its rigs to
keep them in a state of readiness for drilling. Had CDC been
trying to sell its rigs, the maintenance would have been lower
cost and more cosmetic in order to enhance the visual appeal of
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