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sale of the Mall had been consummated.8 Upon being informed of
petitioner's participation in Coastal, they did not voice any
objection or take any action against petitioner. The Pecaris
partnership continues, with petitioner and Messrs. Boyas and
Spillas retaining their respective partnership interests in the
remaining assets and liabilities of the partnership.
Tax Reporting of the Transaction
Pecaris reported the transaction on its Form 1065 U.S.
Partnership Return of Income as a sale of the Mall for $4.8
million with a realized and recognized gain of $3,311,873.9
Pecaris used the $100,000 commission as an offset to reduce the
gain reported on its 1988 return of partnership income as
distributable to petitioner and Messrs. Boyas and Spillas.
8Mr. Spillas testified that he did not know the identity of
the principal parties of Coastal at the time of the transaction,
but became aware of petitioner’s interest in Coastal prior to the
filing of the Pecaris 1988 partnership return, which Mr. Spillas
signed on behalf of Pecaris. Mr. Boyas testified that he did not
recall when petitioner's identity as a partner in Coastal was
revealed to him, but that the reason for his inability to recall
was that he regarded petitioner's role on the other side of the
transaction as unimportant.
9On its 1988 Form 1065 and Form 4797, Pecaris reported and
computed the gain on the sale of the Mall as follows:
Gross sales price . . . . . . . . . . . . $4,800,000
Cost or other basis plus
expenses of sale . . . . . $3,022,670
Depreciation allowed . . . . 1,534,543
Adjusted basis . . . . . . . 1,488,127
Total gain . . . . . . . . . . . . . . . 3,311,873
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