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the enactment of OBRA), provides that the qualified investment
must be apportioned among the trust and its beneficiaries on the
basis of the trust’s income allocable to each. See also sec.
1.48-6, Income Tax Regs. In enacting section 48, Congress
recognized that when income is taxed in part to an organization
and in part to its shareholders or beneficiaries, the investment
credit is apportioned among the parties in accordance with their
sharing of income for tax purposes. S. Rept. 1881, 87th Cong.,
2d Sess. (1962), 1962-3 C.B. 707, 726; H. Rept. 1447, 87th Cong.,
2d Sess. (1962), 1962-3 C.B. 405, 419.
Respondent disallowed petitioner’s energy credit because he
determined none of HEH’s income was allocable to petitioner
during 1995 and, alternatively, because the purported purchase of
energy was, in substance, a sale of solar equipment to
petitioner. Because we hold that petitioner has failed to prove
that any of HEH’s income or HEH’s investment in energy property
was allocable to him during 1995, we need not address
respondent’s second argument.
6(...continued)
(2) any beneficiary to whom any investment
has been apportioned under paragraph (1) shall be
treated (for purposes of * * * [secs. 46, 48, and
50]) as the taxpayer with respect to such
investment, and such investment shall not (by
reason of such apportionment) lose its character
as an investment in new section 38 property or
used section 38 property, as the case may be.
[Emphasis added.]
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