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Richard E. Timbie and Trevor Washington Swett III, for
petitioner in docket No. 14786-96.
Robert J. Shilliday, Jr., for respondent.
OPINION
RUWE, Judge: Respondent determined a deficiency in Tracinda
Corp.'s (Tracinda) Federal income tax for the taxable year ending
January 31, 1991, in the amount of $54,763,119 and an accuracy-
related penalty under section 6662(d)1 in the amount of
$10,952,616. Respondent determined deficiencies in Turner
Broadcasting System, Inc.'s (TBS) Federal income tax for the
taxable year ending December 31, 1991, in the amount of
$21,538,821 and for the taxable year ending December 31, 1992, in
the amount of $49,050,854. Tracinda's deficiency results from
disallowance of a basis adjustment arising out of its acquisition
of United Artists Corp. (UA) from MGM/UA Entertainment Co. (MGM)
in 1986. TBS acquired MGM simultaneously with the sale of UA to
Tracinda. The TBS deficiencies result, in part, from
disallowance of net capital loss carryforward deductions
originating from the 1986 sale of UA and carried forward into
subsequent years. MGM's basis in UA was greater than the
consideration received for all the UA shares sold. The
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the years in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
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