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We find that petitioner failed to offer into evidence a
“written specific plan” relating to the “wrap up” work and
“enhancements and deficiencies” work.
b. Costs Committed or Incurred
Even assuming arguendo that petitioner’s plan satisfies the
written specific plan requirement, we find that petitioner did
not commit or incur one-half of the construction costs as of
December 31, 1985. Petitioner asserts that it satisfied this
requirement because it was jointly obligated for the construction
contracts entered into by the JEA. Respondent argues that
petitioner cannot incur or commit more than 20 percent of the
construction costs to the SJRPP because petitioner owns only a
20-percent interest in the power plant.
While respondent relies on Payless Cashways, Inc. v.
Commissioner, 114 T.C. 72 (2000), petitioner attempts to
distinguishes its case from Payless Cashways. In Payless
Cashways, this Court examined the equipped building rule of TRA
section 203(b)(1)(C).131 The Court found that the taxpayer did
not “incur or commit” more than 50 percent of the costs because
131 TRA sec. 203(b)(1)(C) provides the elements for both the
equipped building and the plant facility transitional rules. The
conference report indicates that the elements of these two
transitional rules have the same meaning. See H. Conf. Rept.
99-841 (Vol. II), supra at II-57, 1986-3 C.B. (Vol. 4) at 57
(noting that the equipped building rule applies when there is a
building and that the plant facility rule applies “where the
facility is not housed in a building.”).
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