FPL Group, Inc. v. Commissioner
United States Tax Court
F, a regulated electric utility, is a wholly owned subsidiary of P. F is required to follow prescribed regulatory rules for regulatory accounting and financial reporting purposes. In preparing its consolidated tax returns for the years in issue, P characterized F's expenditures by using the same characterization that F used for regulatory accounting and financial reporting purposes.
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F, a regulated electric utility, is a wholly owned subsidiary of P. F is required to follow prescribed regulatory rules for regulatory accounting and financial reporting purposes. In preparing its consolidated tax returns for the years in issue, P characterized F's expenditures by using the same characterization that F used for regulatory accounting and financial reporting purposes. In an amended petition, P sought to recharacterize as repair expenses, expenditures which it had characterized as capital expenditures for tax purposes. HELD: P's method of accounting for tax reporting purposes…
1Opinion of the Court
OPINION
Ruwe, Judge:
This matter is before the Court on respondent’s motion for partial summary judgment filed pursuant to Rule 121.1 The sole issue presented is whether petitioner’s attempt to recharacterize as repair expenses, expenditures which it had characterized on its tax returns as capital expenditures for the taxable years 1988 to 1992 is an impermissible change in accounting method under section 446(e).
Background
FPL Group, Inc. (petitioner), is a corporation organized and existing under the laws of the State of Florida with its principal office located in Juno Beach, Florida. Florida…
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