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income, less a $68,750 management fee expense to BBPA. On its
partnership return for 1988, MIT 80 reported partnership taxable
income of $969,315, consisting of $667,997 (one-fourth of the
$2,671,990 deferred income that it was allocating over 4 years
due to the change in accounting method), plus $301,319, the
"Contract Renegotiation fee", less a $1 fee expense to BBPA.
On its partnership return for 1989, MIT 80 reported
partnership taxable income of $1,335,995, which was the remaining
one-half of the $2,671,990 deferred income that it was allocating
due to the change in accounting method, and no expenses.
MIT 80 has pending claims in one of these consolidated cases
to adjust its reported income to zero for the years 1985, 1986,
1987, 1988, and 1989, if we should determine that MIT 80 is a
sham that is not entitled to deduct losses for its prior years.
Respondent agrees that, if we should so find, the requested
adjustments would be appropriate.
During 1990, Dr. Crescenzo transferred his 6.25-percent
interest in MIT 80 in approximately equal shares to Bruce, Bucci,
and Richard Adamucci. Dr. Crescenzo received $63,300 for this
interest, or $132 less than he had invested in MIT 80.
MIT 80 had no activity in 1990 or in 1991, and its
partnership returns reflect no income or loss for those years.
The business of Machise was thereafter transferred to MIT
Transportation Co., Inc., which was wholly owned by Bucci. On
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