- 21 -
amounts with respect to its payment in 1992, 1993, and 1995 of
the expenditures described above (expenditures at issue) relating
to the 1992 amendments to the 1985 sale and leaseback agreements
and the concomitant refinancing of the 1984 tax-exempt bonds:
Taxable Year Amount
1992 $821,075.79
1993 1,989,633.72
1995 12,228,381.46
1 The amount deducted for 1995 is the amount of petitioner’s
expenditures during that year relating to the 1992 amendments to
the 1985 sale and leaseback agreements and the concomitant
refinancing of the 1984 tax-exempt bonds reduced by $157,500,
which represented petitioner’s accrual of certain costs for 1994,
a taxable year not at issue. The record does not explain the
nature of such costs or why such a reduction of petitioner’s 1995
expenditures was made, but the parties agree that the expendi-
tures at issue for 1995 total $2,228,381.46.
Respondent issued a notice of deficiency (notice) to peti-
tioner for its taxable years 1992, 1993, 1995, and 1996. In that
notice, respondent determined that the expenditures at issue must
be capitalized and amortized and deducted over the term of the
modified 1985 sale and leaseback beginning with taxable year 1995
and ending with taxable year 2020. Consequently, respondent
further determined in the notice that petitioner is entitled to a
deduction of $199,869 for each of its taxable years 1995 and
1996.
OPINION
Petitioner bears the burden of proving that the determina-
tions in the notice that remain at issue are erroneous. See Rule
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011