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which was the "Contract Renegotiation Fee" and other expenses.
On its partnership return for 1989, MIT 83 reported partnership
taxable income of $1,218,735, which was the remaining one-half of
the $2,437,470 deferred income that it had allocated due to the
change in accounting method.
For the years 1986, 1987, 1988, and 1989, MIT 83 has filed
administrative adjustment requests to reduce its reported taxable
income to zero if we determine that MIT 83 is a sham that is not
entitled to deduct losses for the prior years. These requests
are pending in two of these consolidated cases, docket Nos.
14820-91 and 3551-92. Respondent has agreed that, if we so
determine, the requested adjustments would be appropriate.
None of the investors in MIT 83 received any cash return on
his or her investment.
MIT 84
On January 1, 1984, Fred and Bruce organized and promoted
MIT 84 as a general partnership. In almost all particulars, the
organization and operation of MIT 84 were the same as those of
MIT 83. BBPA made the general ledger entries of MIT 84 for 1984,
and its adjusting journal entries for 1984, 1985, 1987, and 1988.
The 18 individuals and 3 partnerships who participated in
MIT 84 were clients of BBPA. There were no prospectuses or
offering memoranda or terms sheets for MIT 84.
Like the previous partnerships, MIT 84 agreed to provide all
the individual employees and independent contractors required by
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