Brookshire Brothers Holding, Inc. and Subsidiaries - Page 11

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          which may properly be classified as 15-year property under the              
          MACRS rules.  Rather, their disagreement lies in whether                    
          petitioner’s treatment of the properties as such on tax returns             
          filed for the years at issue constitutes an unauthorized change             
          in method of accounting.                                                    
               Petitioner’s primary contention is that depreciating the gas           
          stations as 15-year property does not reflect a change in                   
          accounting method within the meaning of section 446(e).                     
          According to petitioner, reclassification of the gas stations as            
          15-year property is excepted from characterization as a change in           
          accounting method because the new treatment does not involve a              
          material item, is analogous to a change in useful life, is a mere           
          correction, and does not deviate from an established consistent             
          method of treatment.                                                        
               In the alternative, even if depreciating the gas stations as           
          15-year property is deemed a change in accounting method,                   
          petitioner maintains that consent for such change was received              
          from respondent.  Petitioner alleges that respondent’s acceptance           
          of petitioner’s amended returns for prior years and issuance of             
          refunds constitutes a sufficient consent for the                            
               Conversely, respondent asserts that petitioner changed its             
          method of accounting for the gas station properties, without                
          respondent’s consent, in two respects.  In respondent’s                     

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Last modified: May 25, 2011