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with no major league baseball games played by the Devil Rays
until 1998, and the related expenses incurred by the partnership
in 1998,5 the application of Artnell Co. is appropriate. The
partnership’s deferral of reporting the deposits in income until
1998, the first year in which the Devil Rays played major league
baseball games, more clearly matches the partnership’s related
expenses that were incurred and deducted in 1998. The
partnership may defer until 1998 reporting as income the deposits
received in 1995 and 1996 on the advance season tickets and on
the private suite reservations.
Commissioner v. Indianapolis Power & Light Co., 493 U.S. 203
(1990), on which respondent relies, concerns whether deposits
received by a utility company constituted taxable advance
payments of income or nontaxable security deposits. It does not
require a different result in this case. Therein, the Supreme
Court held that because a taxpayer was required to return
deposits to customers upon termination of service or upon
verification of the customers’ creditworthiness, the security
deposits did not constitute taxable income. Id. at 204-205, 214.
As presented to us by the parties, the question herein is not
whether the deposits the partnership received in 1995 and 1996
5 The $130 million franchise fee was incurred before 1998 but
as indicated it was capitalized, and no amortization of the
portion allocable to player salaries was begun until 1998.
Respondent does not contest this treatment.
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