Kansas City S. Indus. v. Commissioner
United States Tax Court
P was the parent of members of a consolidated group, including two subsidiaries conducting railroad operations. For the taxable calendar years 1970 through 1976, P elected to amortize railroad grading pursuant to sec. 185, I.R.C. In 1977, P filed an application to revoke the election for years after 1976. Held, denial of P's application to revoke the election was an abuse of discretion because its purpose was to prevent P's reliance on favorable Court precedent.
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P was the parent of members of a consolidated group, including two subsidiaries conducting railroad operations. For the taxable calendar years 1970 through 1976, P elected to amortize railroad grading pursuant to sec. 185, I.R.C. In 1977, P filed an application to revoke the election for years after 1976. Held, denial of P's application to revoke the election was an abuse of discretion because its purpose was to prevent P's reliance on favorable Court precedent. Held, further, P was not required to recognize income from sidetrack deposits at the time that construction pursuant to industry…
1Opinion of the Court
COHEN, Judge:
In separate notices of deficiency, respondent determined the following deficiencies in petitioner's Federal income taxes:
Docket No. Year Deficiency
18653-87 1978 $42,274
1979 2,771,434
17654-88 1980 4,129,634
1981 593,299
1982 1,434,129
1983 9,428,727
After concessions, the issues remaining for decision are whether it was an abuse of respondent's discretion to deny petitioner's application to revoke an election to amortize petitioner's railroad grading under section 185(c); whether deposits received by petitioner for the construction of sidetracks in accordance with industry track…
2Cases cited28 opinions
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