Chrysler Corporation, f.k.a. Chrysler Holding Corporation, as Successor by Merger to Chrysler Motors Corporation and Its Consolidated Subsidiaries - Page 10




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          misplaced.                                                                  
               In Hughes Properties, the taxpayer was a Nevada casino that            
          was required by State statute to pay as a jackpot a certain                 
          percentage of the amounts gambled in progressive slot machines.             
          The taxpayer was required to keep a cash reserve sufficient to              
          pay the guaranteed jackpots when won.  Hughes Properties at the             
          conclusion of each fiscal year entered the total of the                     
          progressive jackpot amounts (shown on the payoff indicators) as             
          an accrued liability on its books.  From that total, it                     
          subtracted the corresponding figure for the preceding year to               
          produce the current tax year's increase in accrued liability.  On           
          its Federal income tax return this net figure was asserted to be            
          an ordinary and necessary business expense and deductible under             
          section 162(a).  The Court found that the all events test had               
          been satisfied and the taxpayer was entitled to the deduction.              
          The Court reasoned that the State statute made the amount shown             
          on the payout indicators incapable of being reduced.  Therefore             
          the event creating liability was the last play of the machine               
          before the end of the fiscal year, and that event occurred during           
          the taxable year.                                                           
               We conclude that the cases cited by petitioner do not                  
          strictly stand for the proposition that if a liability is fixed             

               4(...continued)                                                        
          Collieries Co. v. Commissioner, 77 T.C. 1369 (1981) (Court                  
          reviewed); Buckeye Intl., Inc. v. Commissioner, T.C. Memo.                  
          1984-668.                                                                   




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