123 T.C. No. 18
UNITED STATES TAX COURT
THE CHARLES SCHWAB CORPORATION AND SUBSIDIARIES, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent*
Docket Nos. 16903-98, 18095-98. Filed September 29, 2004.
In an earlier opinion, Charles Schwab Corp. &
Subs. v. Commissioner, 122 T.C. 191 (2004) (Schwab II),
we held that sec. 461(d), I.R.C., applied to a 1972
change in California (Cal.) franchise tax law. R
contended that if sec. 461(d), I.R.C., applied, P would
not be entitled to the $932,979 Cal. franchise tax
deduction it had claimed for its 1989 Federal tax year.
P contended that sec. 461(d), I.R.C., did not apply and
that it was entitled to a $1,806,588 deduction. P, on
its Federal returns for the years under consideration,
claimed franchise tax deductions under Cal. law without
considering the 1972 change (as though sec. 461(d),
I.R.C., applied). P did not claim a franchise tax
deduction for its short year ended Dec. 31, 1988, and
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* This Opinion supplements a previously released
Opinion: Charles Schwab Corp. & Subs. v. Commissioner, 122 T.C.
191 (2004).
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