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(A) the tax for the taxable year
computed without such deduction, minus
(B) the decrease in tax under this
chapter * * * for the prior taxable year (or
years) which would result solely from the
exclusion of such item (or portion thereof)
from gross income for such prior taxable year
(or years).
* * * * * * *
(b) Special Rules.--
* * * * * * *
(2) Subsection (a) does not apply to any
deduction allowable with respect to an item which
was included in gross income by reason of the sale
or other disposition of stock in trade of the
taxpayer (or other property of a kind which would
properly have been included in the inventory of
the taxpayer if on hand at the close of the prior
taxable year) or property held by the taxpayer
primarily for sale to customers in the ordinary
course of his trade or business. This paragraph
shall not apply if the deduction arises out of
refunds or repayments with respect to rates made
by a regulated public utility * * * if such
refunds or repayments are required to be made by
the Government, political subdivision, agency, or
instrumentality referred to in such section or by
an order of a court, or are made in settlement of
litigation or under threat of imminence of
litigation.
Petitioner’s argument is essentially the same as the
argument raised by the taxpayer in MidAmerican Energy Co. v.
Commissioner, 114 T.C. ___ (2000), filed this date, and we find
no reason to reach a different conclusion in this case. In
MidAmerican Energy Co., a taxpayer-utility held excess deferred
Federal income tax after Federal income tax rates were reduced in
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