- 45 -
$2,549,264 deferred income that it was allocating over 4 years,
plus $231,253 in accrued interest payable from MPC, less
$28,500--a management fee expense to BBPA.
On its partnership return for 1988, MIT 82 reported
partnership taxable income of $275,156. This amount consisted of
$637,316, again one-fourth of the $2,549,264 deferred income that
MIT 82 was allocating over 4 years, less $332,159--the amount,
rounded off, that MIT 82 had agreed to forgo in exchange for
early payment to terminate the employee leasing agreement--less
professional fees of $30,001.
On its partnership return for 1989, MIT 82 reported gross
income of $1,274,633. This was the remaining one-half of the
$2,549,264 deferred income that MIT 82 allocated over 4 years due
to the change in accounting method. MIT 82 reported no expenses.
MIT 82 thus reported substantial amounts of income for the
years 1986, 1987, 1988, and 1989. In two of these consolidated
cases (docket Nos. 14819-91 and 3456-92) MIT 82 has claims
pending that the amounts of income it reported for those years
should be reduced to zero if we determine that MIT 82 is a sham
that is not entitled to deduct losses for its prior years.
Respondent agrees that, if we should so determine, the requested
adjustments would be appropriate.
None of the investors in MIT 82 ever received any cash
return from his investment.
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