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Year Deficiency
1981 $ 12,593,692
1982 51,639,634
1983 82,327,873
1984 153,418,047
1985 223,328,166
After concessions, the issue for decision is whether
petitioner sold property to its wholly owned subsidiary in
intercompany transactions pursuant to section 1.1502-13, Income
Tax Regs., where the subsidiary received its rights to acquire
the property by assignment from third parties who were not
members of petitioner’s consolidated group. This issue is before
the Court on cross-motions for partial summary judgment pursuant
to Rule 121. The record shows, and the parties agree, that there
is no genuine issue of material fact. Unless otherwise
indicated, all section references are to the Internal Revenue
Code in effect for the years in issue, and all Rule references
are to the Tax Court Rules of Practice and Procedure.
Background
Northern Telecom Inc. (petitioner) is the common parent of
an affiliated group of corporations, which, at the time of the
filing of the petition, had a principal place of business in
Nashville, Tennessee. Petitioner is a corporation organized and
existing under the laws of the State of Delaware. Petitioner and
its subsidiaries filed consolidated Federal income tax returns
during all of the years in issue.
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