TAX COURT OPINION

Case: Entergy Corporation and Affiliated Subsidiaries
Docket Number: 25132-06
Judge: Halpern
Opinion Type: memo
Filed: 07/28/2010
Pages: 3

T .C . Memo . 2010-16 6 UNITED STATES TAX COUR T ENTERGY CORPORATION & AFFILIATED SUBSIDIARIES, Petitioner M . COMMISSIONER OF INTERNAL REVENUE, Responden t Docket No . 25132-06 . Filed July 28, 2010 . Stephen D . Gardner and William H . O'Brien , for petitioner . Michael C . Prindible and Melissa D .'Arndt , for_respondent . MEMORANDUM OPINION HALPERN, Judge : Entergy Corp . (petitioner) is the commo n parent of an affiliated group of corporations making a consolidated return of income . Respondent determined deficiencies of $17,341,254 and $61,7 .29,798 in the group' s Federal income tax for its 1997 and 1998 taxable (calendar) years, respectively . The issues for decision .are whethe r SERVED Jul 28 2010 2 - respondent properly denied (1) a foreign tax credit for the United Kingdom (U .K .) windfall tax paid by petitioner's indirect U .K . subsidiary and, (2) depreciation deductions that petitioner's U .S . subsidiaries claimed for street and area lighting asset s (the street light issue) . A forthcoming report will address the first-issue . The second issue is identical to the issue in PPL Corp . v . Commissioner ; 135 T .C . (2010), which we also decide today, and the facts in this case relevant to that issue ar e identical to the corresponding facts in PPL . Unless otherwise stated, all section references are to the Internal Revenue Code in effect for 1997 and 1998 . The parties have stipulated that, in 1997 and 1998, certain of petitioner's U .S . .subsidiaries provided street and highway lighting and nonroadway lighting for public and private entities . The sole issue is whether street and area lighting assets are used in the "distribution. of electricity for sale" . See Rev . Proc . 87-56, 1987-2 C .B . 674, 685 . (If they are, then those assets have a recovery period of 20 years, see id . ; if they are not, then they have a recovery period of 7 years, see id . , 1987-2 C:B . at 675 .) In PPL , we answer that question in the negative . ' 'In PPL Corp . v . Commissioner , 135 T .C . (2010), the Commissioner made an alternative argument, asserting that if street and area lighting assets were not used in the distributio n of electricity for sale, then they were "land improvements" . See Rev . Proc . 87-56, 1987-2 C .B . 674, 677 . In contrast, here respondent expressly concedes any alternative argument . Hi s (continued . . .) Respondent makes no argument that leads us to believe we erred in PPL . We rely on PPL in holding for petitioner on the street 3 - light issue . '( . . .continued) concession does him no harm, however, because in PPL we also found against the Commissioner on his alternative argument .