SCOTUS Reports

Tag: 1978

  • Thompson v. Commissioner, 69 T.C. 760 (1978): Timely Mailing and Validity of Small Business Corporation Election

    Thompson v. Commissioner, 69 T. C. 760 (1978)

    A document is considered timely filed if mailed on or before the due date, even without a postmark, when sufficient evidence shows it would have been timely postmarked.

    Summary

    In Thompson v. Commissioner, the Tax Court addressed whether a small business corporation election was timely filed under Section 1372(c)(1). Robert Hicks Thompson sought to deduct a net operating loss from his wholly owned corporation, Transcontinental Aviation, Ltd. , Inc. The court found that despite the absence of a postmark on the election form, sufficient evidence indicated it was mailed on the last day of the filing period, December 31, 1969. Additionally, the court held the election valid for the intended tax year, despite an incorrect effective date on the form, based on precedent from Ralph L. Brutsche.

    Facts

    Robert Hicks Thompson owned all the stock of Transcontinental Aviation, Ltd. , Inc. , which adopted a taxable year ending November 30. On December 31, 1969, Thompson signed Form 2553 to elect small business corporation status for Transcontinental’s taxable year beginning December 1, 1969. The form was erroneously dated January 1, 1969, but was placed in a properly addressed envelope and mailed on December 31, 1969. The Internal Revenue Service received the form on January 6, 1970, without the envelope, and thus no postmark was available. Transcontinental reported a net loss of $58,818. 75 for the year ending November 30, 1970, which Thompson attempted to deduct on his personal tax return.

    Procedural History

    The Commissioner determined a deficiency of $31,314. 94 in Thompson’s 1970 federal income tax, disallowing the deduction of the corporation’s net operating loss on the grounds that the small business corporation election was not valid. The Tax Court was tasked with determining whether the election was timely filed and valid for the intended tax year.

    Issue(s)

    1. Whether the Form 2553 was timely filed under Section 7502(a)(1) despite the absence of a postmark?
    2. Whether the Form 2553 constituted a valid election for Transcontinental’s taxable year beginning December 1, 1969, despite the incorrect effective date stated on the form?

    Holding

    1. Yes, because the court found sufficient evidence that the form was mailed on December 31, 1969, and would have been timely postmarked if the envelope had been retained.
    2. Yes, because the election, filed within the first month of the taxable year, was valid for that year, following the precedent set in Ralph L. Brutsche.

    Court’s Reasoning

    The court applied Section 7502(a)(1), which deems a document timely filed if mailed on or before the due date. Despite the lack of a postmark, the court relied on testimony that the form was mailed on December 31, 1969, before the deadline for filing the election. The court cited Fred Sylvan, where it was held that a postmark is not essential if evidence convincingly shows the document would have been timely postmarked. The court also addressed the incorrect effective date on the form, citing Ralph L. Brutsche, where an election filed within the required period was held valid despite an incorrect effective date. The court concluded that the election was valid for the tax year beginning December 1, 1969, allowing Thompson to deduct the net operating loss.

    Practical Implications

    This decision emphasizes the importance of timely mailing for tax filings and the flexibility in interpreting election forms. Practitioners should ensure documentation of mailing dates, particularly when postmarks are unavailable. The ruling clarifies that a small business corporation election is valid if filed within the statutory period, even with clerical errors in the effective date. This case influences how similar tax elections are analyzed, stressing the importance of intent and procedural compliance over strict formalities. It also impacts business planning by affirming the ability to pass through losses to shareholders when elections are timely, even if imperfectly executed.

  • Dietzsch v. Commissioner, 69 T.C. 1195 (1978): Applying Collateral Estoppel in Tax Law

    Dietzsch v. Commissioner, 69 T. C. 1195 (1978)

    Collateral estoppel applies when the facts and law of a prior case are the same as those in the current case, even in tax law contexts.

    Summary

    In Dietzsch v. Commissioner, the petitioner attempted to avoid taxation on cash dividends under section 305 by arguing they should be treated as stock dividends due to a pre-existing agreement with General Motors. The Tax Court, however, applied collateral estoppel based on a prior Court of Claims decision involving the same issue for different years. The court found no material difference in facts or law between the cases, thus estopping the petitioner from relitigating the issue. This ruling emphasizes the application of collateral estoppel in tax cases, ensuring consistency in legal outcomes when facts and law remain unchanged across different tax years.

    Facts

    Petitioner received cash dividends from Dietzsch Pontiac-Cadillac in 1967, which he was obligated to use to purchase class A stock from General Motors and convert into class B stock under a 1964 agreement. The same issue was litigated for the tax years 1965 and 1966 in the Court of Claims, resulting in a ruling against the petitioner. The facts presented in the current case were identical to those in the prior case, with the only difference being the tax year in question.

    Procedural History

    The Court of Claims previously decided against the petitioner for the tax years 1965 and 1966. The petitioner then brought the same issue before the Tax Court for the 1967 tax year. The Tax Court considered the same stipulation of facts used in the Court of Claims case and additional testimony regarding the petitioner’s obligation under the Dealer Investment Plan.

    Issue(s)

    1. Whether collateral estoppel applies to the petitioner’s case regarding the tax treatment of cash dividends under section 305 for the year 1967, given the prior Court of Claims decision for the years 1965 and 1966.

    Holding

    1. Yes, because the facts and law of the current case are identical to those in the prior Court of Claims case, thus collateral estoppel applies and the petitioner is estopped from relitigating the issue.

    Court’s Reasoning

    The Tax Court applied the principle of collateral estoppel, which requires that both the facts and the law of the current case be the same as those in the prior case. The court found that the only difference between the two cases was the tax year in question, and all other facts remained identical. The court cited Richmond, Fredericksburg & Potomac Railroad Co. and Hercules Powder Co. v. United States to support its application of collateral estoppel. The court noted that the petitioner’s obligation to use dividends for stock purchases was unchanged from the prior case, and the relevant section of the tax code (section 305) had not been altered. The court also mentioned that even if it were to consider the merits, it would likely reach the same conclusion as the Court of Claims, but this was unnecessary due to the application of collateral estoppel.

    Practical Implications

    This decision reinforces the application of collateral estoppel in tax litigation, emphasizing that taxpayers cannot relitigate issues already decided in prior cases if the facts and law remain the same. Practitioners should be aware that attempting to challenge settled issues in subsequent years based on identical facts and law will likely be unsuccessful. This ruling may influence how taxpayers and their attorneys approach tax planning and litigation, particularly in cases involving multi-year disputes over the same issue. It also underscores the importance of considering all relevant facts and potential legal arguments at the outset of a case, as subsequent attempts to relitigate may be barred.

  • Estate of Schuler v. Commissioner, 70 T.C. 409 (1978): Restoration of Specific Gift Tax Exemption Not Allowed When Gifts Included in Decedent’s Estate

    Estate of Schuler v. Commissioner, 70 T. C. 409 (1978)

    A taxpayer cannot restore a previously claimed specific gift tax exemption when gifts, split with a spouse, are later included in the decedent’s estate.

    Summary

    In Estate of Schuler v. Commissioner, the Tax Court ruled that a taxpayer could not restore her specific gift tax exemption after her husband’s gifts, which she had split under section 2513, were included in his estate. The court found that her consent to split the gifts made them valid inter vivos gifts, and thus, the exemptions used could not be restored despite the estate’s inclusion of the gifts. This decision clarifies that the restoration doctrine does not apply when a taxpayer’s gift tax returns accurately reflect gifts made, even if those gifts later impact estate tax calculations.

    Facts

    The petitioner, after her husband’s death in 1961, had consented to split his gifts made in 1960 and 1961 under section 2513, using portions of her specific gift tax exemption. These gifts were later included in her husband’s estate under section 2035. In 1970, she claimed the full $30,000 exemption on her gift tax return, arguing that the exemptions used in 1960 and 1961 should be restored since the gifts were included in her husband’s estate, resulting in no gift tax credit for the estate under section 2012.

    Procedural History

    The case was submitted to the Tax Court under Rule 122. The court’s decision was based on the stipulated facts and focused on whether the petitioner was entitled to restore her specific gift tax exemption.

    Issue(s)

    1. Whether the petitioner is entitled to restore the portion of her specific gift tax exemption used in 1960 and 1961 after the gifts were included in her husband’s estate.

    Holding

    1. No, because the gifts made in 1960 and 1961 were valid inter vivos gifts due to the petitioner’s consent under section 2513, and thus, the exemptions used could not be restored.

    Court’s Reasoning

    The court applied section 2513, which allows spouses to split gifts, and found that the petitioner’s consent made the gifts valid for gift tax purposes. The court distinguished this case from Kathrine Schuhmacher, where an exemption was restored because no valid gift was made. Here, the gifts were valid, and thus, the exemptions could not be restored. The court also addressed the petitioner’s reliance on Rachel H. Ingalls, reaffirming that the inclusion of gifts in the estate does not negate their validity for gift tax purposes. The court noted that the absence of a section 2012 credit for the estate was irrelevant to the petitioner’s gift tax liability. The decision emphasized that the petitioner’s consent to split the gifts was not based on a mistake of law or fact, and thus, could not be revoked or altered retroactively.

    Practical Implications

    This decision underscores the importance of understanding the interplay between gift and estate tax provisions. Taxpayers must carefully consider the implications of consenting to split gifts under section 2513, as this consent creates valid gifts for gift tax purposes, even if those gifts are later included in the estate. Practitioners should advise clients that exemptions used for split gifts cannot be restored if the gifts are included in the decedent’s estate, impacting estate planning strategies. This case also highlights the need for clear communication between spouses about the tax consequences of gift splitting. Subsequent cases, such as English v. United States, have followed this reasoning, reinforcing its impact on tax law.

  • Schopfer v. Commissioner, T.C. Memo. 1978-49 (1978): Defining ‘Binding Written Contract’ for Accelerated Depreciation on Used Property

    T.C. Memo. 1978-49

    Informal corporate documents, such as a letter and meeting minutes, are insufficient to establish a ‘binding written contract’ as required for the exception to restrictions on accelerated depreciation for used Section 1250 property under Section 167(j)(6)(C) of the Internal Revenue Code.

    Summary

    The petitioners, shareholders of a corporation (Limited) who formed a partnership (Warren), sought to depreciate a building transferred from Limited to Warren using an accelerated method. Section 167(j)(4) generally disallows accelerated depreciation for used Section 1250 property acquired after July 24, 1969, but an exception exists under Section 167(j)(6)(C) for property acquired pursuant to a binding written contract in effect on July 24, 1969. The petitioners argued a June 6, 1969 letter and minutes from a June 23, 1969 meeting constituted such a contract. The Tax Court held that these documents did not constitute a binding written contract, and the arrangement lacked the bona fide, arm’s length nature required for the exception.

    Facts

    Prior to July 24, 1969, the Schopfer family owned all the stock of Limited, which owned a building constituting used Section 1250 property. On June 6, 1969, Matthew Byrne, president of Limited, sent a letter to the Schopfers outlining a plan to liquidate Limited and transfer the building to a partnership to be formed (Warren), to allow for accelerated depreciation. A meeting of Limited’s shareholders occurred on June 23, 1969, and a memorandum summarizing the meeting was prepared. Warren partnership was formed, and Limited liquidated, distributing the building to Warren. Warren claimed accelerated depreciation on the building. The IRS disallowed the accelerated depreciation.

    Procedural History

    The Commissioner of Internal Revenue disallowed the partnership’s use of accelerated depreciation. The taxpayers petitioned the Tax Court to contest the Commissioner’s determination.

    Issue(s)

    1. Whether a June 6, 1969 letter and memorandum of a June 23, 1969 meeting constituted a “written contract” for the acquisition of Section 1250 property binding on the taxpayer as of July 24, 1969, within the meaning of Section 167(j)(6)(C) of the Internal Revenue Code.

    2. Whether the alleged contract represented a “bona fide agreement negotiated at arm’s length” as required by Treasury Regulations for the exception under Section 167(j)(6)(C).

    Holding

    1. No, because the June 6 letter and the memorandum of the June 23 meeting did not constitute a “written contract” as required by Section 167(j)(6)(C).

    2. No, because the arrangement was not a “bona fide agreement negotiated at arm’s length,” primarily serving a tax avoidance purpose and lacking genuine economic substance beyond tax benefits.

    Court’s Reasoning

    The court reasoned that the June 6 letter and meeting memorandum were insufficient to form a binding written contract. Minutes of a meeting are merely a record of what occurred, not a contract itself. Quoting Lawrence v. Premier Indemnity Assur. Co., the court stated, “minutes of a meeting are not a written instrument. Their function is merely to act as a written record of what took place at the meeting.” The court emphasized that while enforceability is a factor, a “written contract” must first exist. Further, the court found the arrangement was not “bona fide” or “arm’s length.” The liquidation and transfer were solely for tax advantages, lacking genuine economic substance. The court noted, “It cannot be denied that, on the record before us, the only purpose for the liquidation of Limited was the perceived tax advantage of accelerated depreciation of the property in the hands of the partnership.” Tax exemptions are narrowly construed, and Congress intended the exception in Section 167(j)(6)(C) to apply to genuine, arm’s length contracts, not tax-motivated intra-corporate restructurings.

    Practical Implications

    This case underscores the importance of formal, legally sound contracts when seeking tax advantages based on exceptions to general rules, especially concerning depreciation. Informal documentation, even if reflecting intent, may not suffice as a “binding written contract” for tax purposes. Taxpayers must demonstrate that agreements are bona fide and arm’s length, not solely motivated by tax avoidance. This case serves as a cautionary example that tax-driven transactions, lacking independent economic substance and relying on loosely documented agreements, are vulnerable to IRS scrutiny and may not qualify for intended tax benefits. It highlights the necessity for clear, formal contracts when structuring transactions to meet specific tax code exceptions and the courts’ focus on the substance over the form of such arrangements.

  • Carrieres v. Commissioner, 70 T.C. 237 (1978): Tax Implications of Dividing Community Property in Divorce

    Carrieres v. Commissioner, 70 T. C. 237 (1978)

    In a divorce, the exchange of community property for separate property results in taxable gain to the extent of the separate property received.

    Summary

    In Carrieres v. Commissioner, the Tax Court addressed the tax consequences of dividing community property during a divorce. The court held that when part of the community property (Sono-Ceil Co. stock) was exchanged for separate property (cash), the transaction was partially taxable. Petitioner transferred her interest in the stock to her ex-husband, receiving both community and separate property in return. The court ruled that the exchange was taxable only to the extent of the separate property received, establishing a proportionate recognition of gain based on the ratio of separate to total property received.

    Facts

    George and the petitioner, married and residing in California, were unable to agree on the division of their community property during their divorce proceedings. The Superior Court awarded George the 4,615 shares of Sono-Ceil Co. stock, valued at $241,000, and required him to pay the petitioner $89,620. 01 to equalize the division. George paid this sum in a lump sum, using $65,000 borrowed from Sono-Ceil Co. , $13,111. 66 from his community half of cash in bank accounts, and $11,508. 35 from his separate property. The petitioner transferred her interest in the stock to George in exchange for the payment.

    Procedural History

    The petitioner filed her 1968 income tax return claiming no taxable gain from the property division. The IRS determined a deficiency of $26,921. 29, which the petitioner contested. The Tax Court reviewed the case and issued a decision in 1978.

    Issue(s)

    1. Whether the division of community property in a divorce is taxable when part of the division involves the exchange of community property for separate property?
    2. If taxable, to what extent must the gain be recognized?

    Holding

    1. Yes, because the exchange of community property for separate property constitutes a taxable event under the Internal Revenue Code.
    2. The gain must be recognized proportionally to the extent of the separate property received, because the court found that the nonstatutory nonrecognition principle applies only to the community property portion of the exchange.

    Court’s Reasoning

    The court applied the general rule that gain from the sale or exchange of property is recognized unless a nonrecognition rule applies. It noted the well-established judge-made nonrecognition rule for equal divisions of community property in divorce, as seen in cases like Commissioner v. Mills. However, the court distinguished this case because the petitioner received separate property in exchange for her community interest in the stock. The court reasoned that this created a sale to the extent of the separate property, necessitating recognition of gain. The court used the ratio of separate property received to the total property received to determine the taxable portion of the gain, reflecting the intent of the parties and avoiding a “cliff effect” that would render the entire transaction taxable if any separate property were involved. The court also clarified that the Superior Court’s order did not change the tax consequences of the transaction, as it merely replaced an agreement the parties could not reach themselves.

    Practical Implications

    This decision impacts how attorneys and divorcing couples should approach the division of community property to minimize tax consequences. When structuring property settlements, parties should be aware that using separate property to equalize an unequal division of community property can trigger taxable gains. Practitioners should calculate the potential tax liability and advise clients on structuring the division to minimize tax exposure, possibly by maximizing the use of community property in the exchange. This case has been cited in later decisions, such as in Conner and Showalter, where the courts continued to apply the principle of proportionate recognition of gain when separate property is involved in the division of community assets.

  • Wisconsin Big Boy Corp. v. Commissioner, 69 T.C. 1101 (1978): Allocation of Income Under Section 482 for Integrated Business Enterprises

    Wisconsin Big Boy Corp. v. Commissioner, 69 T. C. 1101 (1978)

    Section 482 allows the Commissioner to allocate income among commonly controlled entities if necessary to prevent tax evasion or clearly reflect income, particularly when there is a high degree of integration among the entities.

    Summary

    Wisconsin Big Boy Corp. (WBB) and its subsidiaries operated a highly integrated restaurant business. The IRS allocated all income and deductions of the subsidiaries to WBB under Section 482, arguing that WBB’s extensive control and management over its subsidiaries justified this allocation to prevent tax evasion and clearly reflect WBB’s income. The Tax Court upheld this allocation, finding that WBB’s management and control were so pervasive that the subsidiaries were essentially facets of a single enterprise. The decision emphasizes the importance of arm’s-length transactions and proper compensation when dealing with commonly controlled entities, impacting how integrated business structures should be assessed for tax purposes.

    Facts

    WBB, owned by Marcus and Kilburg, operated as a franchisee of Big Boy restaurants and set up its restaurants as wholly owned subsidiaries. WBB controlled all policy and operations of these subsidiaries, including financial affairs, personnel, advertising, and purchases. WBB charged a management fee based on a percentage of gross sales. The IRS determined that WBB should report all income and deductions of its subsidiaries, arguing that the subsidiaries were not dealing at arm’s length and that WBB’s control indicated an integrated business operation.

    Procedural History

    The IRS issued deficiency notices to WBB and its subsidiaries, reallocating all income and deductions to WBB under Section 482. WBB challenged this reallocation in the U. S. Tax Court. The court upheld the IRS’s determination, finding that WBB failed to show it was adequately compensated for its extensive management and control over its subsidiaries.

    Issue(s)

    1. Whether the IRS’s allocation of all income and deductions of WBB’s subsidiaries to WBB under Section 482 was arbitrary, capricious, or unreasonable.

    Holding

    1. No, because the court found that WBB’s pervasive control and management of its subsidiaries justified the IRS’s allocation to prevent tax evasion and clearly reflect WBB’s income.

    Court’s Reasoning

    The court applied Section 482, which allows the IRS to allocate income and deductions among commonly controlled entities to prevent tax evasion or clearly reflect income. The court found that WBB’s control over its subsidiaries was so extensive that they operated as a single, integrated business. WBB set all policies, managed finances, and controlled operations, indicating that the subsidiaries were not dealing at arm’s length. The court emphasized that WBB’s management fee structure did not adequately compensate WBB for its services, supporting the IRS’s reallocation. The court cited previous cases like Hamburgers York Road, Inc. , where similar integration and control justified income reallocation. The court also noted that WBB failed to show it received fair compensation for its services, a critical factor in determining the reasonableness of the IRS’s allocation. The court concluded that the IRS’s determination was not arbitrary, capricious, or unreasonable given the integrated nature of WBB’s business operations.

    Practical Implications

    This decision underscores the importance of maintaining arm’s-length transactions and proper compensation within commonly controlled entities. Businesses with integrated operations must ensure that management fees and other intercompany transactions reflect fair market value to avoid IRS reallocations under Section 482. The case highlights that the IRS may scrutinize fee structures and operational integration to determine if income is being shifted to reduce tax liability. Legal practitioners should advise clients on structuring their businesses to prevent such reallocations, ensuring that each entity’s role and compensation are clearly defined and justified. Subsequent cases have applied this ruling to similar situations, reinforcing the need for clear separation of functions and fair compensation among related entities.

  • Minchew v. Commissioner, 69 T.C. 719 (1978): Floating Docks as Tangible Personal Property for Tax Benefits

    Minchew v. Commissioner, 69 T.C. 719 (1978)

    Floating docks, designed for portability and not inherently permanent structures, qualify as tangible personal property for the investment tax credit and additional first-year depreciation, while supporting pilings, being permanently affixed to land, do not.

    Summary

    In Minchew v. Commissioner, the Tax Court addressed whether floating docks and pilings were “tangible personal property” eligible for an investment tax credit and additional first-year depreciation. The partnership petitioners operated a marina and claimed these tax benefits for their floating dock system. The IRS argued that the docks and pilings were permanent land improvements and thus ineligible. The Tax Court, after inspecting the docks and reviewing evidence, held that the floating docks were tangible personal property due to their portability and non-permanent nature, distinguishing them from inherently permanent structures like wharves or traditional docks. However, the court determined that the pilings, deeply embedded in the seabed, were permanent and did not qualify as tangible personal property.

    Facts

    The petitioners, a partnership, operated a marina and constructed floating docks in a basin. These docks consisted of interconnected units that floated on the water, rising and falling with the tide. Pilings were driven into the seabed to limit the lateral movement of the docks. Gangways, hinged to permanent piers on shore, connected the docks to land via rollers. Electrical and plumbing utilities were connected to the docks from land-based sources. The docks were designed to be portable and reconfigurable; finger units could be interchanged, sections could be moved, and the entire dock system could be towed to a new location. The pilings, in contrast, were driven deep into the mud and required piledrivers for installation and removal.

    Procedural History

    The Commissioner of Internal Revenue disallowed the partnership’s claim for investment tax credit and additional first-year depreciation on the floating docks and pilings. The partnership then petitioned the Tax Court to contest the Commissioner’s determination.

    Issue(s)

    1. Whether the floating docks constitute “tangible personal property” within the meaning of sections 48 and 179 of the Internal Revenue Code, thereby qualifying for the investment tax credit and additional first-year depreciation.
    2. Whether the pilings supporting the floating docks constitute “tangible personal property” within the meaning of sections 48 and 179 of the Internal Revenue Code, thereby qualifying for the investment tax credit and additional first-year depreciation.

    Holding

    1. Yes, for the floating docks. The floating docks are “tangible personal property” because they are not inherently permanent structures and are readily portable and reconfigurable.
    2. No, for the pilings. The pilings are not “tangible personal property” because they are permanent improvements to the land, deeply embedded and requiring specialized equipment for installation and removal.

    Court’s Reasoning

    The court reasoned that “tangible personal property” under sections 48 and 179 of the Internal Revenue Code excludes land and inherently permanent structures. Referencing regulations §1.48-1(c) and §1.179-3(b), the court noted that while docks are generally listed as non-qualifying property in regulations, the regulations did not contemplate floating docks of the type in question. The court emphasized the factual evidence and its own inspection, concluding that these floating docks were not inherently permanent. The court highlighted the docks’ portability, reconfigurability, and independent floating nature, stating, “They float on the water as independent units, rising and falling with the tide. The purpose of the pilings is only to limit lateral motion of the docks. The docks are portable. They can readily be removed and placed in other locations or configurations.” The court dismissed the IRS’s argument that attachment to land via gangways, utilities, and pilings made the docks permanent, noting that even annexed property can be considered tangible personal property, citing examples like “production machinery, printing presses, transportation and office equipment.” In contrast, the court found the pilings to be permanent due to their deep and fixed nature in the seabed, requiring piledrivers for installation and removal. The court rejected the IRS’s “all or nothing” argument, treating the docks and pilings as separate components. Finally, the court dismissed Revenue Ruling 67-67, which specifically addressed these docks and deemed them not to be tangible personal property, stating that revenue rulings are not legally binding in the same way as judicial precedent, citing Henry C. Beck Builders, Inc., 41 T.C. 616, 628 (1964).

    Practical Implications

    Minchew v. Commissioner provides a practical distinction for tax purposes between permanent structures and tangible personal property, particularly in the context of waterfront facilities. It clarifies that the classification of docks as non-tangible personal property in tax regulations is not absolute and depends on the specific characteristics of the structure. The case emphasizes a functional and factual analysis focusing on portability and permanence rather than mere attachment to land. For legal practitioners and businesses, this decision highlights the importance of documenting the design and nature of assets to demonstrate their eligibility for tax benefits. It suggests that structures designed for relocation and not permanently affixed to land, even if connected to utilities and shore, can qualify as tangible personal property. Later cases and rulings would need to consider the specific facts and degree of permanence and portability when applying this principle to similar structures.