Georgia Fed. Bank, F.S.B. v. Commissioner
United States Tax Court
From 1970 through 1982, P deducted additions to its bad debt reserve. The amounts deducted were calculated with reference to P's taxable income for each year. From 1980 through 1984, P sustained net operating losses (NOL's). Held, subdivisions (vi) and (vii) of sec. 1.593-6A(b)(5), Income Tax Regs. are invalid to the extent they require that taxable income reflect any NOL carrybacks before the addition to bad debt reserve is calculated for certain financial institutions.
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From 1970 through 1982, P deducted additions to its bad debt reserve. The amounts deducted were calculated with reference to P's taxable income for each year. From 1980 through 1984, P sustained net operating losses (NOL's). Held, subdivisions (vi) and (vii) of sec. 1.593-6A(b)(5), Income Tax Regs. are invalid to the extent they require that taxable income reflect any NOL carrybacks before the addition to bad debt reserve is calculated for certain financial institutions. Pacific First Federal Savings Bank v. Commissioner,94 T.C. 101 (1990), on appeal (9th Cir., Feb. 8, 1991), followed.…
1Opinion of the Court
OPINION
WELLS, Judge:
The instant case is before us on petitioner's motion for summary judgment. Respondent determined a deficiency of $114,193 in petitioner's Federal income tax for its taxable year ended April 11, 1986. At the time the petition in the instant case was filed, petitioner's principal place of business was located in Atlanta, Georgia. From 1970 through 1982, petitioner computed its deduction for the addition to its bad debt reserves using the percentage of taxable income method set forth in section 593(b)(2)(A).1 From 1980 through 1984, petitioner sustained net operating losses…
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3Cited by17 opinions
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