PDV America, Inc. and Subsidiaries - Page 26

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          petitioner argues that CITGO may need to move a tank by lifting             
          it off the ground in order to repair corrosion of the steel                 
          plates on the tank’s underside.  Petitioner also asserts that the           
          least intrusive method for replacing contaminated sand underneath           
          a tank involves moving the tank, either by suspending the tank in           
          the air or temporarily moving the tank off its foundation, to the           
          side.  Furthermore, petitioner argues, possible changes in                  
          terminal demand may lead to the sale or closing of terminals or             
          the sale of tanks, scenarios in which it is reasonably likely               
          that CITGO may have to move tanks.                                          
               On the other hand, respondent contends that the tanks’ ages,           
          their location on fee simple land, and CITGO’s attempts to extend           
          their useful lives with extensive maintenance and repairs                   
          demonstrate that CITGO intended to keep the tanks in place                  
          permanently.  Respondent also asserts that CITGO’s two prior tank           
          relocations for environmental reasons were unusual occurrences              
          and do not demonstrate “any real likelihood” that CITGO may have            
          to move a tank.                                                             
               In Whiteco Indus., Inc. v. Commissioner, 65 T.C. at 672, we            
          concluded that the taxpayer “[did] not intend, nor could it                 
          realistically expect, the signs to remain permanently in place.”            
          We observed that the taxpayer was aware that “numerous                      
          situations” could arise which would necessitate moving the signs            
          either before or after the expiration of the taxpayer’s contract            

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Last modified: May 25, 2011