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Commissioner v. Brookshire Bros. Holding, Inc. & Subs.,
___ F.3d ___ (5th Cir., Jan. 29, 2003), affg. T.C.
Memo. 2001-150, followed.
Robert J. Gumser, for petitioner.
Yvonne M. Peters, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
NIMS, Judge: Respondent determined Federal income tax
deficiencies for petitioner’s tax fiscal years ended in August
1996, August 1997, and August 1998, in the amounts of $147,277,
$31,983, and $46,729, respectively. At trial, petitioner
conceded that the modified accelerated cost recovery system
(MACRS), alternative depreciation system rules, in accordance
with section 168(g)(1), required petitioner to use a 10-year
recovery period and the straight-line method of depreciation for
items of petitioner’s equipment that were placed in service after
1986 and used predominantly outside of the United States. The
issue for decision is whether a change in MACRS classification
that results in a change in depreciation method and recovery
period is a change in method of accounting for purposes of an
adjustment pursuant to section 481(a).
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