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Petitioner's Federal Income Tax Returns and the Notices of
Deficiency
On its 1992 Form 1120X, Amended U.S. Corporation Income Tax
Return, petitioner claimed a $204,288 deduction for amounts it
paid to Union Mexico. Respondent disallowed that portion of the
claimed deduction (totaling $181,137) that related to payment for
inspection and bathing costs but allowed that portion relating to
Union Mexico’s furnishing of water and electricity to petitioner.
4(...continued)
Inspection and Parasitical Bath, required by the
governments of both countries for the exportation of
cattle, for the cattle that are exported to Santa
Teresa, to be performed by its personnel in its
installations at San Jeronimo.
THIRD.--As payment for the referenced services, Union
Ganadera Regional de Chihuahua, Inc. is obligated to
pay Union Ganadera Regional de Chihuahua the amount
established by both parties as annexed to this
agreement, for each head of cattle that is exported
through the Sanitary Unit at San Jeronimo to the
stockyeards [sic] at Santa Teresa.
The attachment to the contract states as follows:
In conformity with the THIRD CLAUSE of the contract,
both parties agree on a charge of US$1.50 (ONE DOLLAR
AND FIFTY CENTS) per head of cattle that crosses from
the Sanitary Unit at San Jeronimo to the stockyards at
Santa Teresa, New Mexico.
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Last modified: May 25, 2011