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Respondent argues that section 274 limits the amounts of
petitioner’s deductions attributable to the personal use of the
Falcon to the amounts reported by petitioner as wages
attributable to that personal use.
This is not an issue of first impression. In Sutherland
Lumber-Southwest, Inc. v. Commissioner, 114 T.C. 197, 206 (2000),
affd. per curiam __ F.3d __ (8th Cir., July 3, 2001), we held
that “section 274(e)(2) acts to except the deductions in
controversy from the effect of section 274, and, accordingly,
petitioner’s deduction for operation of the aircraft is not
limited to the value reportable by its employees.” Respondent
recognizes that Sutherland Lumber-Southwest, Inc. precludes us
from limiting petitioner’s deduction to the amount treated as
compensation to the Recordses, unless we choose to overrule our
prior opinion. Respondent urges us to do just that.
In Sutherland Lumber-Southwest, Inc., we provided an
extensive analysis of the statute, the context in which it
appears, its legislative history, and relevant regulations. In
affirming our opinion, the Court of Appeals for the Eighth
Circuit stated:
After a complete review de novo, we agree with the Tax
Court’s well-reasoned opinion, and affirm on the basis
of the analysis set forth therein. * * * Because we
have nothing of substance to add to the Tax Court’s
thorough analysis, further discussion is superfluous.
[Sutherland Lumber-Southwest, Inc. v. Commissioner, __
F.3d at __.]
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