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in an earlier case and Opinion of this Court, Charles
Schwab Corp. & Includable Subs. v. Commissioner, 107
T.C. 282 (1996), it had been decided that P was
entitled to a $932,979 deduction for its 1988 short year.
R, after we held in Schwab II that sec. 461(d),
I.R.C., applied and that P was not entitled to a
$932,979 deduction for 1989, moved for reconsideration.
R has changed his position and now concedes that P is
entitled to a $932,979 Cal. franchise tax deduction for
its 1989 Federal tax year. P would accept R’s
concession but continues to argue that it is entitled
to a $1,806,588 deduction.
Held: The effect of sec. 461(d), I.R.C., analyzed
and in the factual context of this case, P is entitled
to a $932,979 Cal. franchise tax deduction.
Glenn A. Smith, Erin M. Collins, Laurence J. Bardoff, and
Patricia J. Galvin, for petitioner.
Rebecca T. Hill, for respondent.
SUPPLEMENTAL OPINION
GERBER, Chief Judge: In an earlier Opinion in these cases,1
two primary issues were decided. Respondent moved for
reconsideration concerning our holding on the California
franchise tax issue.2 Respondent seeks reconsideration
1 Charles Schwab Corp. & Subs. v. Commissioner, 122 T.C. 191
(2004) (Schwab II). In Schwab II we referenced a 1996 Opinion
concerning petitioner: Charles Schwab Corp. & Includable Subs.
v. Commissioner, 107 T.C. 282 (1996) (Schwab I). The Findings of
Fact in Schwab II are incorporated herein by this reference.
2 In Schwab II we held that sec. 461(d), I.R.C., limited
petitioner’s deduction for California franchise tax to an amount
accrued and computed under California’s pre-1972 franchise tax
(continued...)
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