Union Carbide Foreign Sales Corp. v. Commissioner
United States Tax Court
P leased an asset, and the terms of the lease became onerous or burdensome. Under lease agreements, P was entitled to either terminate the lease or purchase the leased asset by the payment of a certain sum. P chose to acquire the leased asset and, relying on Cleveland Allerton Hotel, Inc. v. Commissioner, 166 F.2d 805 (6th Cir. 1948), revg. a Memorandum Opinion of this Court dated May 7, 1947, seeks to bifurcate and allocate the asset acquisition cost into two portions.
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P leased an asset, and the terms of the lease became onerous or burdensome. Under lease agreements, P was entitled to either terminate the lease or purchase the leased asset by the payment of a certain sum. P chose to acquire the leased asset and, relying on Cleveland Allerton Hotel, Inc. v. Commissioner, 166 F.2d 805 (6th Cir. 1948), revg. a Memorandum Opinion of this Court dated May 7, 1947, seeks to bifurcate and allocate the asset acquisition cost into two portions. P asserts one portion should represent the value of the leased asset without considering the value of the existing lease. P…
1Opinion of the Court
OPINION
Gerber, Judge:
Respondent moved for partial summary-judgment on the legal question of whether section 167(c)(2)2 applies to petitioner’s3 acquisition of ownership of a previously leased oceangoing vessel. Respondent contends that section 167(c)(2) would require petitioner to allocate to the depreciable asset all of its cost and, further, that petitioner was not entitled to allocate a portion of the cost to a deduction for relief from the terms of a burdensome lease. Petitioner argues that section 162 is applicable to the portion of the cost that it contends was attributable to buying…
2Cases cited11 opinions
- Consumer Product Safety Commission v. GTE Sylvania, Inc.Supreme Court of the United States · 1980
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Sundstrand Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1994
- Sundstrand Corp. v. CommissionerUnited States Tax Court · 1992
- Jones v. Liberty Glass Co.Supreme Court of the United States · 1948
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