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traded. It is owned by its approximately 2,700 members, and its
principal place of business was in Chicago, Illinois, when it
petitioned the Court. It is not a member of a controlled group
of corporations within the meaning of section 1563(a) of the
Internal Revenue Code of 1986.
Discussion
The parties agree that respondent’s motion can be decided by
way of summary judgment, and so do we. Respondent argues that
petitioner has no affiliates for purposes of section 204(a)(7)(C)
because it is not a member of a controlled group of corporations.
Respondent asserts that the word “affiliates” for purposes of
section 204(a)(7)(C) requires that the taxpayer be a corporation
and that the corporation be a member of a controlled group.
Respondent relies on the flush language of section 204(a)(7),
asserting that this language sets forth the exclusive definition
of the word “affiliates” for purposes of section 204(a)(7)(C).
We disagree with respondent’s assertion that the flush
language of section 204(a)(7) contains the exclusive definition
of the word “affiliates” for purposes of section 204(a)(7).
Section 204(a)(7) provides:
(7) Certain Leasehold Improvements.– * * * [The
repeal of the investment tax credit and accelerated
cost recovery system] shall not apply to any reasonable
leasehold improvements, equipment and furnishings
placed in service by a lessee or its affiliates if–-
(A) the lessee or an affiliate is the
original lessee of each building in which
such property is to be used,
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