National Bancorp of Alaska, Inc. - Page 2

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          the issue for decision is whether petitioner’s deduction for                
          expenses incurred in providing employees with nonbusiness flights           
          on a company-owned airplane is limited by section 2742 to the               
          amount reported as imputed income to the recipient employees.               
               The parties submitted this case fully stipulated.  The                 
          stipulation of facts and the attached exhibits are incorporated             
          herein by this reference.  Petitioner is a corporation that had             
          its principal place of business in Anchorage, Alaska, at the time           
          it filed its petition.  At all relevant times, petitioner had a             
          fiscal and taxable year ending December 31 and used the accrual             
          method of accounting for both financial reporting and tax                   
               For the year in issue, petitioner was the parent corporation           
          of an affiliated group of corporations that provided banking and            
          other financial services and filed consolidated Federal income              
          tax returns.  NB Aviation, Inc. (Aviation) was a wholly owned               
          subsidiary of petitioner and was a member of petitioner’s                   
          consolidated group.3                                                        
               Aviation owned a 1974 Gulfstream G-11B jet aircraft (the               

               2Unless otherwise indicated, all section references are to             
          the Internal Revenue Code in effect for the year in issue, and              
          all Rule references are to the Tax Court Rules of Practice and              
               3Petitioner and Aviation are collectively referred to as               

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Last modified: May 25, 2011