- 2 - terminating a burdensome lease. R contends that sec. 167(c)(2), I.R.C., enacted in 1993, requires that the acquisition cost must be allocated solely to the acquired tangible capital asset. P contends that the holding of Cleveland Allerton Hotel, Inc. permits the allocation. Held: Sec. 167(c)(2), I.R.C., interpreted to prohibit allocation of any portion of the asset acquisition cost to a deduction for P’s termination of a burdensome lease. Harold J Heltzer, Philip F. McGovern, Jerry L. Robinson, and Howard Mark Weinman, for petitioners. Steven R. Winningham, Joseph F. Long, Carmino J. Santaniello, S. Katy Lin, and Robin L. Peacock, for respondent. OPINION GERBER, Judge: Respondent moved for partial summary judgment on the legal question of whether section 167(c)(2)2 applies to petitioner’s3 acquisition of ownership of a previously leased oceangoing vessel. Respondent contends that section 167(c)(2) would require petitioner to allocate to the depreciable asset all of its cost and, further, that petitioner was not entitled to allocate a portion of the cost to a deduction for 2 Unless otherwise indicated, section references are to the Internal Revenue Code in effect for the periods under consideration, and Rule references are to the Tax Court Rules of Practice and Procedure. 3 References to “petitioner” in this group of related and consolidated cases refers to Union Carbide Corp., petitioner in docket Nos. 14643-97 and 11119-99.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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