- 7 -
No local government has terminated any of Wometco's
franchise agreements for noncompliance with the terms thereof,
has declined to extend any of Wometco’s franchise agreements
after expiration of the term, or has at any time specifically
requested Wometco to rebuild any of its cable television systems.
For 1990 through 1993, Wometco timely filed consolidated
U.S. Corporation income tax returns claiming $1,927,396 in
cumulative ITC relating to costs of the six rebuilds that were
undertaken from 1989 through December 31, 1990, the line
extensions that were built in 1990, and a small ITC carryforward
relating to costs of line extensions built in 1986, 1987, and
1989.
On audit, respondent disallowed the total $1,927,396 in ITC
claimed by Wometco relating to the six rebuilds and the line
extensions.
OPINION
Before 1986, ITC was allowed under section 46 for the costs
of certain types of property. In 1986, Congress eliminated ITC
for the costs of property placed in service after December 31,
1985. See Tax Reform Act of 1986 (TRA 1986), Pub. L. 99-514,
sec. 211(a), 100 Stat. 2085, 2166, adding Code sec. 49(a).
Several transition rules, however, were provided that
preserved ITC for the costs of qualified property placed in
service after December 31, 1985, and before January 1, 1991, as
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011