115 T.C. No. 32
UNITED STATES TAX COURT
UNION CARBIDE FOREIGN SALES CORPORATION, ET AL.,1 Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket Nos. 14641-97, 14642-97, Filed November 8, 2000.
14643-97, 11119-99.
P leased an asset, and the terms of the lease
became onerous or burdensome. Under lease agreements,
P was entitled to either terminate the lease or
purchase the leased asset by the payment of a certain
sum. P chose to acquire the leased asset and, relying
on Cleveland Allerton Hotel, Inc. v. Commissioner, 166
F.2d 805 (6th Cir. 1948), revg. a Memorandum Opinion of
this Court dated May 7, 1947, seeks to bifurcate and
allocate the asset acquisition cost into two portions.
P asserts one portion should represent the value of the
leased asset without considering the value of the
existing lease. P further asserts that the remaining
portion should be allowed as a business deduction for
1 Cases of the following petitioners are consolidated
herewith: UOP, Catalysts, Adsorbents and Process Systems, Inc.,
Tax Matters Partner, docket No. 14642-97; Union Carbide
Corporation and Subsidiaries, docket No. 14643-97; and Union
Carbide Corporation and Subsidiaries, docket No. 11119-99.
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