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July 22, 1988. With respect to the “wrap up” work, we find that
petitioner did not begin construction by December 31, 1985,
because this work was not authorized until 1988.
Similarly, Mr. Reid testified that the work orders for the
“enhancements and deficiencies” work were authorized in 1989.
With respect to the “enhancements and deficiencies” work, we find
that petitioner did not begin construction by December 31, 1985,
because this work was not authorized until 1989.
We hold that petitioner is not entitled to an ITC under TRA
section 203(b)(1)(B) for the “wrap up” work and “enhancements and
deficiencies” work because it did not incur or commit the lesser
of $1 million or 5 percent of the cost of the property by
December 31, 1985, and did not begin construction until after
December 31, 1985.
2. Distribution and Transmission Substations
Petitioner seeks an ITC under the self-constructed property
transitional rule for costs incurred for the components of the
distribution and transmission substations during the 1988, 1989,
and 1990 taxable years of $3,264,386, $8,091,517, and $4,413,670,
respectively. Petitioner asserts that “Each Distribution and
Transmission Substation constitutes one functionally integrated
piece of property comprised of all its component parts, as
evidenced by its original designs and plans, and its ultimate
construction and use in FPL’s business.” As functionally
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