Opinion ID: 987042
Heading Depth: 1
Heading Rank: 5

Heading: R.C. ' 1060; Danielson, 378 F.2d at 775.

Text: Peco uses the same argument with the Canton asset acquisition agreement. It argues that the agreement is not enforceable because the term AReal Property: Improvements@ is ambiguous. Peco claims it was the parties= intent that the term would encompass specialized mechanical systems and other Section 1245 8 Case: 12-12169 Date Filed: 07/02/2013 Page: 9 of 10 property. For the same reasons as in the Sebastopol agreement, the term is not ambiguous because the parties allocated the purchase price among three assets: AReal Property: Land,@ AReal Property: Improvements,@ and AMachinery, Equipment, Furnitures [sic] and Fixtures.@ The Tax Court found that the decision to allocate the purchase price separately among the three assets clearly evidences Peco=s intent not to allocate any part of the purchase price to subcomponent assets.6 We agree. The term AReal Property: Improvements@ is not ambiguous, and therefore, the original Canton allocation schedule is binding upon Peco. I.R.C. ' 1060; Danielson, 378 F.2d at 775. In binding Peco to both agreements, the Commissioner can be assured that both the buyer (Peco), and the respective sellers, (Green Acre and MD), treat the assets consistently for federal tax purposes. As the Danielson court observed, A>where parties enter into an agreement with a clear understanding of its substance and content, they cannot be heard to say later that they overlooked possible tax consequences.=@ Danielson, 378 F.2d at 778, citing Hamlin=s Trust v. Comm=r, 209 F.2d 761, 765 (10th Cir. 1954). 6 The Canton agreement also contained a merger clause stating that the contract, accompanying exhibits, and closing documents Aconstitute the entire agreement between the Parties.@ 9 Case: 12-12169 Date Filed: 07/02/2013 Page: 10 of 10