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sections 61 and 162, leaving the applicability of section 274 as
the only matter in controversy.
Respondent determined income tax deficiencies of $341,631
and $119,558 for petitioner’s 1992 and 1993 tax years,
respectively. The deficiency determinations were based on
adjustments to deductions involving airplane expenses, net
operating loss, environmental tax, alternative minimum tax, and
contributions. Petitioner moved for partial summary judgment
solely with respect to the disallowance of a portion of its
claimed deduction for expenses to operate the aircraft, asking
the Court to hold either that section 274 does not apply or, if
section 274 applies, that section 274(e)(2) excepts petitioner
from the provisions of section 274. If we decide that petitioner
is correct with respect to either contention, petitioner’s
partial summary judgment motion will be granted.
Respondent, in his cross-motion for partial summary
judgment, asks the Court to hold that section 274 is applicable
and, further, that section 274(e)(2) limits petitioner’s
deduction to the value of the benefits received by employees with
respect to the vacation flights. Likewise, if respondent’s
position is incorrect with respect to either contention,
petitioner’s partial summary judgment motion will be granted and
respondent’s denied.
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