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Subsequently, on April 19, 1994, this Court entered a decision
reflecting the settlement of petitioners’ 1988 and 1989 tax
years. As a consequence, respondent concedes that to the extent
petitioner realized a gain on the disposal of the computer
leasing equipment, the gain is reduced by suspended losses from
1985-89. Petitioners did not claim a charitable contribution
deduction on their 1990 Federal income tax return relating to the
property transferred to the School.
At the end of the trial, respondent orally moved for leave
to conform the pleadings to the evidence. Petitioners objected.
We took the motion under advisement. We subsequently issued an
order indicating that to the extent we allow respondent to amend
the pleadings to conform to the proof we would grant petitioners
the same privilege. To this end, we directed the parties to
brief the consequences of the sale of the computer equipment and
rights to the lease for purposes of claiming a charitable
contribution deduction.
OPINION
As a preliminary matter, we must resolve two issues:
Whether the second statutory notice of deficiency is valid and
whether respondent’s motion to conform the pleadings to the
evidence should be granted.
Validity of Respondent’s Second Statutory Notice of Deficiency
In their petition, petitioners allege that respondent
improperly issued a second statutory notice of deficiency.
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