Museum of Flight Foundation v. United States

ORDER

COUGHENOUR, Chief Judge.

This a tax case involving the Museum of Flight’s lease of the first 747 back to Boeing to serve as a test-bed for new high-thrust engines in the 777 project. The parties have stipulated to the factual record. The only issue in this case is whether the ordinarily tax-exempt Museum is liable for taxes on the lease income as “unrelated business taxable income” under 511(a)(1) of the Internal Revenue Code. The parties presented oral arguments on this point, and the Court ruled from the bench that the lease income was not taxable because the lease did not constitute a…