SUTHERLAND LUMBER-SOUTHWEST

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SUTHERLAND LUMBER-SOUTHWEST ( sutherland-lumber-southwest )

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-4 - sections 61 and 162, leaving the applicability of section 274 as the only matter in controversy. Respondent determined income tax deficiencies of $341,631 and $119,558 for petitioner’s 1992 and 1993 tax years, respectively. The deficiency determinations were based on adjustments to deductions involving airplane expenses, net operating loss, environmental tax, alternative minimum tax, and contributions. Petitioner moved for partial summary judgment solely with respect to the disallowance of a portion of its claimed deduction for expenses to operate the aircraft, asking the Court to hold either that section 274 does not apply or, if section 274 applies, that section 274(e)(2) excepts petitioner from the provisions of section 274. If we decide that petitioner is correct with respect to either contention, petitioner’s partial summary judgment motion will be granted. Respondent, in his cross-motion for partial summary judgment, asks the Court to hold that section 274 is applicable and, further, that section 274(e)(2) limits petitioner’s deduction to the value of the benefits received by employees with respect to the vacation flights. Likewise, if respondent’s position is incorrect with respect to either contention, petitioner’s partial summary judgment motion will be granted and respondent’s denied.

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