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on or before December 31, 1985.
On brief, respondent concedes that the first requirement has
been met in that construction commenced on or before December 31,
1985. However, respondent argues that Payless has failed to
prove that it meets the remaining requirements.
Payless bears the burden of proving that it qualifies for
relief under the transitional provision. See Rule 142(a); Welch
v. Helvering, 290 U.S. at 115. We agree that Payless has failed
to establish that more than one-half of the cost of the building,
including its machinery and equipment, was incurred or committed
before January 1, 1986. On brief, Payless states: “Although
actual costs for equipment and furnishings of the other 2
Pershing Square space [the 59-percent of the building not leased
by Payless] is not available, Payless’ costs were $14,812,179 for
41 percent of the building.” (Emphasis added.) H. Conf. Rept.
99-841 (Vol. II), at II-56 (1986), 1986-3 C.B. (Vol. 4) 1, 56,
states:
Where the costs incurred or committed before March 2,
1986 (January 1, 1986, for the investment tax credit)
do not equal more than half the cost of the equipped
building, each item of machinery and equipment is
treated separately for purposes of determining whether
the item qualifies for transitional relief.
Payless’ failure to establish the total cost of the building,
including its machinery and equipment, is fatal to the argument
that more than one-half of the cost of the equipped building was
committed or incurred before January 1, 1986. Without knowing
the total cost, it is logically impossible to establish that more
than one-half of that amount has been exceeded.
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