- 14 - the cost of severing Rose employees and terminating leases, and closing down and liquidating unneeded Rose infrastructure. On the basis of internal judgment and experience, petitioner determined that 5 years was a suitable period for the Rose customers to be absorbed into petitioner and to bear the overhead burdens in parity with petitioner’s existing accounts at the time of acquisition. OPINION I. California Franchise Tax This issue arises in connection with the parties’ disagreement concerning the application and interpretation of section 461(d) and section 1.461-1(d)(1), Income Tax Regs. Section 461(d) was enacted to proscribe the acceleration of State and local tax deductions due to State or local legislation enacted after 1960. Ultimately, this is a matter of timing and a question of for which year(s) petitioner is entitled to deduct California franchise tax. Petitioner’s position is that section 461(d) was enacted to prevent situations where taxpayers might receive two franchise tax deductions in the same taxable year. The post-1960 California legislation in question does not, in petitioner’s factual circumstances, cause more than one deduction in any year under consideration. Conversely, respondent’s position is thatPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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