Coggin Automotive Corporation - Page 3

                                        - 3 -                                         
               Tax Year Ended                     Deficiency                          
                    June 26, 1993                 $432,619                            
                    Dec. 31, 1993            432,619                                  
                    Dec. 31, 1994            432,619                                  
                    Dec. 31, 1995            432,619                                  
          These deficiencies stem from respondent’s determination requiring           
          petitioner to recapture its LIFO reserves upon conversion from a C          
          corporation to an S corporation effective June 27, 1993.                    
               The issue for decision is whether petitioner is subject to             
          LIFO recapture pursuant to section 1363(d) as a consequence of a            
          change in the structure of petitioner and its subsidiaries.  For            
          the reasons set forth below, we hold that it is.                            
               All section references are to the Internal Revenue Code as in          
          effect for 1993.   All dollar amounts are rounded.                          
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.  The          
          stipulation of facts and the attached exhibits are incorporated             
          herein by this reference.                                                   
               At the time the petition in this case was filed, Coggin                
          Automotive Corp., formerly known as Coggin-O’Steen Investment               
          Corp., was a Florida corporation with its principal place of                
          business in Jacksonville, Florida.  (Herein, both Coggin Automotive         
          Corp. and Coggin-O’Steen Investment Corp. are referred to as                

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Last modified: May 25, 2011