- 12 - are excepted from inventory and, alternatively, that by virtue of its ownership and placement of model manufactured homes on the retail sales lots ADI participates directly in the sales of the manufactured homes to retail customers, and therefore that ADI’s leased sales lots should be treated as “on-site” storage facilities and the various costs in dispute should be treated as on-site storage costs that are excepted from inventory. Respondent argues that for ADI the costs in question do not constitute deductible marketing, selling, or distribution costs, and that (assuming the lot lease payments may be treated as storage costs) the lot lease payments do not constitute “on-site” storage costs because the manufactured homes are sold by ADI to the independent salespersons and not “exclusively” to retail customers. We first address ADI’s alternative argument. As noted, the applicable regulations relating to on-site storage costs expressly state that to be excepted from inventory treatment on- site storage costs must relate to property sold by a taxpayer “exclusively” to retail customers. Sec. 1.263A-3(c)(5)(ii)(B), Income Tax Regs. On the record before us and although ownership of the manufactured homes by the independent salespersons appears to be brief and rather transitory, we are not prepared to overlook the role of the independent salespersons who clearly have aPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011