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(i.e., receivables). See, e.g., secs. 704(c), 731, 734(b), 743(b),
751.
We recognize that in several instances courts have found the
entity approach better than the aggregate approach. For example,
in P.D.B. Sports, Ltd. v. Commissioner, 109 T.C. 423 (1997), this
Court used the entity approach for purposes of applying section
1056. Similarly, in Madison Gas & Elec. Co. v. Commissioner, 72
T.C. 521, 564 (1979), affd. 633 F.2d 512 (7th Cir. 1980), this
Court and the Court of Appeals for the Seventh Circuit applied the
entity approach in determining whether expenses were ordinary and
necessary under section 162. Likewise, in Brown Group, Inc. &
Subs. v. Commissioner, 77 F.3d 217 (8th Cir. 1996), revg. 104 T.C.
105 (1995), the Court of Appeals for the Eighth Circuit concluded
that the entity approach, rather than the aggregate approach,
should be used in characterizing income (subpart F income) earned
by the partnership. We do not believe the holdings in those cases
to be dispositive here. The outcomes in those cases were based
upon the specific legislative histories and statutory schemes of
the respective Code provisions at issue. Each court viewed the
respective statute in the context in which it was enacted and
concluded that the entity approach was more appropriate than the
aggregate approach to carry out Congress’ intent. Here, as stated,
both the legislative history and the statutory scheme of section
1363(d) mandate the application of the aggregate approach.
Finally, we do not believe that section 1363(d)(4)(D) operates
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