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constitute income to petitioner, but rather when the deposits
should be included in the partnership’s income under the clear
reflection of income standard of section 446.
Respondent notes the partnership’s deduction in 1995 and
1996 of expenses relating to its minor league baseball operation,
to general operations, and to interest on the financing obtained
to pay the $130 million franchise fee. We agree with petitioner
that the partnership’s deduction in years prior to 1998 of minor
league baseball expenses, of general startup operating expenses,
and of current year interest expense is not inconsistent with the
deferral until 1998 of deposits relating specifically to the
Devil Rays’ 1998 major league baseball season.
With regard to the $125,000 sponsor fee that the partnership
received in 1996, the evidence is incomplete and does not
adequately establish any basis for deferring the sponsor fee to
1998. We sustain respondent’s determination that the sponsor fee
should be included in petitioner’s income when received in 1996.
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011