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give effect to the requested adjustments eliminating income
reported for the later years. Respondent's concession should not
be affected by the fact that, while we did not determine the
partnerships themselves to be shams, we have determined that
their transactions were shams.
Petitioners in the "Fred Bryen Promotions" series of cases
who have signed "piggyback agreements" should be treated
similarly. Because the transactions were shams, it follows that
these petitioners did not receive taxable income from those
transactions. The amounts received through the transactions that
we have determined to lack economic substance or a business
purpose must therefore be subtracted from the taxable income
reported by those partners for the years at issue, and their
partnerships' taxable income thereby reduced. See Arrowhead
Mountain Getaway, Ltd. v. Commissioner, T.C. Memo. 1995-54.
Respondent's opening brief lists those years that are open
and subject to adjustment for purposes of eliminating income
reported. Petitioners' reply brief asserts that respondent's
list omits 2 such years. This is the sort of administrative
matter that the parties should resolve during the Rule 155
process. We urge them to do so.
In the same vein, Machise/Intercoastal has made another
point that we believe to be correct. For the years at issue, it
urges that, if it may not deduct the interest at issue, neither
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