Payless Cashways, Inc. and Its Subsidiaries - Page 3

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          results from a disallowance of claimed investment tax credits               
          attributable to leasehold improvements, furnishings, and                    
          equipment acquired for, and placed in service at, petitioners’              
          corporate headquarters during petitioners’ 1986 taxable year.               
          Petitioners now claim they are entitled to an investment credit             
          in an amount greater than claimed on their return.  The sole                
          issue for decision is whether petitioners (hereinafter referred             
          to as Payless) are entitled to an investment tax credit pursuant            
          to one of the transition rules contained in the Tax Reform Act of           
          1986 (TRA), Pub. L. 99-514, 100 Stat. 2085.1   An unrelated issue           
          involving a claimed net operating loss carryback will require a             
          Rule 1552 computation.                                                      
                                  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.  Payless’ principal place            
          of business was located in Kansas City, Missouri, when the                  
          petition was filed.  Payless has had its corporate headquarters             

               1The transition rules relied on are secs. 204(a)(7) (world             
          headquarters rule) and 203(b)(1)(C) (equipped building rule) of             
          the Tax Reform Act of 1986 (TRA), Pub. L. 99-514, 100 Stat. 2085,           
          2156, 2144, respectively.                                                   
               2Unless otherwise indicated, all section references are to             
          the Internal Revenue Code in effect for the year in issue, and              
          all Rule references are to the Tax Court Rules of Practice and              

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