New York Football Giants, Inc. - Page 6

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          T.C. 278, 280-281 (1991); Maxwell v. Commissioner, 87 T.C. 783              
          (1986); Allen Family Food, Inc. v. Commissioner, T.C. Memo. 2000-           
          327; see S. Rept. 97-640, at 25 (1982), 1982-2 C.B. 718, 729.               
               No FSAA was issued to petitioner or to its shareholders.               
          Thus, if the built-in gains tax is a subchapter S item, as                  
          respondent contends, the notice of deficiency is invalid to the             
          extent it relates to that item for petitioner’s fiscal years 1996           
          and 1997.                                                                   
          C.   The Built-In Gains Tax                                                 
               Section 1374 imposes a corporate level tax on an S                     
          corporation’s built-in gain recognized during the 10-year period            
          beginning with the first taxable year for which the corporation             
          was an S corporation.  Sec. 1374(a), (d)(3), (7).  Built-in gain            
          is measured by the appreciation in value of any asset over its              
          adjusted basis as of the time a corporation converts from C to S            
          status.  H. Conf. Rept. 99-841 (Vol. II), at II-203 (1986), 1986-           
          3 C.B. (Vol. 4) 1, 203; see also sec. 1374(d)(3)(B); Colo. Gas              
          Compression, Inc. v. Commissioner, 116 T.C. 1, 2-3 (2001); Coggin           
          Auto. Corp. v. Commissioner, 115 T.C. 349, 363 (2000).  An S                
          corporation is liable for the built-in gains tax on the                     
          disposition of any asset except to the extent that it establishes           
          that it did not own the asset on the day it converted from C to S           
          status, or the fair market value of the asset was less than its             
          adjusted basis on the first day of the first taxable year for               

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