TG Missouri: Opinion
MARVEL, Judge:
Respondent determined deficiencies in petitioner’s Federal income tax of $3,815,746 and $1,544,033 for 1998 and 1999,1 respectively. After concessions,2 the sole issue for consideration is whether production molds petitioner sold to its customers are assets subject to depreciation for purposes of sections 41 and 174.3 The resolution of that issue determines whether the amounts petitioner paid to third-party toolmakers for the molds4 should have been included as “cost of supplies” in petitioner’s qualified research expenses for purposes of computing its tentative research credits for 1997,5 1998, and 1999.
footnotes
1 Petitioner’s 1999 tax year began on Jan. 1, 1999, and ended on Mar. 31, 1999.
2 With the exception of the adjustments addressed in this Opinion, petitioner concedes all adjustments made by respondent with respect to 1998 and 1999.
3 Unless otherwise indicated, all section references are to the Internal Revenue Code (Code) in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure.
4 The amounts for 1997, 1998, and 1999 were $25,909,801, $12,363,599, and $4,602,854, respectively.
5 Petitioner’s 1997 tax year is only relevant as a carry-forward year, as respondent did not determine a deficiency for that year.
