- 6 -
increased bases in the stock of the target corporations when the
target corporations are sold to unrelated third-party purchasers
in 1986 and 1987 depends for its success upon dividend treatment
for the gross proceeds of the nine cross-chain sales. See secs.
1.1502-32(a) and 1.1502-33, Income Tax Regs.
Following concessions,4 therefore, we must decide:
3(...continued)
regulations, see secs. 1.1502-32(a) and 1.1502-33, Income Tax
Regs. as in effect for the years at issue, a consolidated group
member’s basis in a subsidiary was increased or decreased, dollar
for dollar, by changes in the earnings and profits of the
subsidiary. The Commissioner subsequently amended the
consolidated return investment adjustment regulations generally
for determinations and tax years beginning on or after Jan. 1,
1995. T.D. 8560, 1994-2 C.B. 200.
4In its petition, petitioner asserted (1) that respondent
failed to use the Becker “separate return limitation year” net
operating loss of $85,164,319 in computing petitioner’s group
taxable income for the 1987 taxable year; (2) respondent failed
to take into account the recalculated amount of environmental tax
deductions for the 1987 and 1988 taxable years; (3) respondent
failed to allow a separate fuel tax credit and instead included
such credit in petitioner’s general business credits for the 1986
taxable year; (4) respondent failed to include petitioner’s
available general business tax credits in determining
petitioner’s alternative minimum tax for the 1988 taxable year;
and (5) respondent failed to take into account $98,505 of Federal
income tax withheld by Newmont Mining on dividends paid to a
Canadian subsidiary of petitioner during the 1987 taxable year.
In its petition, petitioner also stated that respondent agreed
with petitioner’s position regarding adjustments (1)-(4). In the
answer to the petition, respondent conceded adjustments (1), (2),
and (4). Respondent also conceded that the disagreements
regarding adjustments (1)-(4) would be resolved in computing any
final deficiencies in this case. With respect to adjustment (5),
respondent denied the adjustment in the answer but did not raise
the issue on brief or at trial. Adjustment (5) is, therefore,
deemed conceded. See Rule 151(e)(4) and (5); Petzoldt v.
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011