Herbert C. Haynes, Inc. - Page 28

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               In reaching all of our holdings herein, we have considered             
          all arguments made by the parties, and to the extent not                    
          mentioned above, we find them to be irrelevant or without                   
          merit.9                                                                     
                                             Decision will be entered                 
                                        under Rule 155.                               












               9  We note that secs. 611 and 631 and the regulations                  
          thereunder contain special rules of accounting for the timber               
          industry.  See secs. 611, 631; sec. 1.611-3, Income Tax Regs.               
          (relating to cost depletion of timber), sec. 1.631-1, Income Tax            
          Regs. (creating an election to consider the cutting of timber as            
          a sale or exchange); see also RLC Indus. Co. v. Commissioner, 98            
          T.C. 457 (1992) (analyzing taxpayer’s method of computing timber            
          depletion under sec. 611), affd. 58 F.3d 413 (9th Cir. 1995).               
               Neither party argued in its briefs that these code sections            
          are dispositive of the issues presented in this case.                       
          Additionally, neither party addressed the interplay of these code           
          sections with secs. 447 and 448, or the rules regarding inventory           
          in the regulations under secs. 611 and 631.  Accordingly, we will           
          not address these issues.                                                   
               We note that while petitioner mentioned sec. 631(a) in                 
          passing in its reply brief, petitioner did not raise the                    
          aforementioned issues.  Furthermore, we will not consider issues            
          that are raised for the first time in a reply brief.  See Foil v.           
          Commissioner, 92 T.C. 376, 418 (1989), affd. 920 F.2d 1196 (5th             
          Cir. 1990); Markwardt v. Commissioner, 64 T.C. 989, 997 (1975).             





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