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games to which the advance season tickets and the suite
reservations related.
The $125,000 sponsor fee received in 1996 was reported as
income on the partnership’s 1997 Federal partnership tax return.
The funds the partnership received in 1996 from major league
baseball in connection with third-party licenses of major league
baseball names, logos, and emblems were reported as income on the
partnership’s Federal partnership tax return for 1996.
No portion of the $130 million franchise fee (fully paid by
the partnership prior to 1998) was deducted or amortized by the
partnership for Federal partnership tax purposes until 1998, the
year in which the Devil Rays began playing major league baseball
games. In 1995, 1996, and 1997, the partnership capitalized the
$130 million franchise fee. The $74,725,000 portion of the
franchise fee that the partnership allocated to player contracts
the partnership amortized and deducted over the lives of the
player contracts, beginning in 1998, the year in which the Devil
Rays played its first game. For 1998, the partnership deducted
$18,764,389 as amortization on the $74,725,000 allocated to the
player contracts.
On audit, respondent treated the deposits the partnership
received in 1995 and in 1996 on advance season tickets and on
private suite reservations as income to the partnership for 1995
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Last modified: May 25, 2011