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the sale of the Mall had not been included by petitioner in his
gross income.
OPINION
We address one procedural or evidentiary issue and two sets
of substantive tax issues: First, whether we are permitted to
look beyond the terms of the purchase agreement and the Pecaris
partnership agreement to determine the gain realized by Pecaris
on the sale of the Mall; and second, the amount of the Pecaris
gain for tax purposes and the amount thereof to be allocated to
petitioner, and the correlative questions of the tax treatment of
the credits or their equivalents received by Pecaris and
petitioner and contributed by petitioner to the capital of
Coastal. We then consider the additions to tax.
I. Whether Danielson Requires Agreement With Respondent's
Determination
Respondent determined and continues to argue that Pecaris
agreed to sell and did sell the entire Mall to Coastal for $4.8
million, and that petitioner’s recognized gain on his
distributive 25-percent share of partnership gain from the sale
of the Mall is $827,968. Petitioners argue that the transaction
should be treated as a sale by Pecaris of a 75-percent undivided
interest in the Mall for $3.6 million, no part of the gain on
which is allocable to him, and a distribution by Pecaris--
nontaxable to him under section 731--of a 25-percent undivided
interest in the Mall, followed by his contribution--nontaxable to
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