United States Federal Circuit

In this case, the Court of Federal Claims granted summary judgment to defendant United States on grounds that plaintiff energy company may not include future nuclear decommissioning liabilities that it assumed when it purchased three nuclear power plants in the basis of the acquired assets in its 2001 through 2003 tax returns. The Claims Court reasoned that because those nuclear power plants would not be decommisioned until years later, plaintiff's decommissioning liabilities did not satisfy the economic performance requirement of 26 U.S.C. section 461(h). The judgment of the Claims Court is affirmed, where: 1) section 461(h) is applicable in determine when and whether an accrual method taxpayer, such as plaintiff, incurs future nuclear decommissioning liabilities for purposes of calculating the basis of an acquired nuclear power plant and associated assets; and 2) plaintiff did not economically perform the decommissioning activities at issue as of 2001 through 2003, the relevant tax years.

Appellate Information

• Decided 03/11/2015
• Published 03/11/2015

Judges

• Lourie

Court

• United States Federal Circuit

Counsel