Hugh and Linda Janow - Page 5

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                  the petitioners' interest in Securities Arbitrage Co.                                   
                  for all years.                                                                          
                        2.     Adjustments to the petitioners' income tax                                 
                  liabilities for the taxable years involved herein which                                 
                  relate, directly or indirectly, to Securities Arbitrage                                 
                  Co. will be determined by the terms of the agreement in                                 
                  Exhibit A.  Such adjustments will be incorporated in a                                  
                  final decision to be entered by this Court for Docket                                   
                  No. 17775-87.                                                                           

                  In the Form 906, Closing Agreement On Final Determination                               
            Covering Specific Matters (the Closing Agreement), attached to                                
            the Stipulation, the parties agreed to the following pertinent                                
            matters:                                                                                      
                        WHEREAS, an issue exists between the parties as to                                
                  whether taxpayers are entitled to deduct losses as a                                    
                  result of their Securities Arbitrage Co. investment,                                    
                        WHEREAS, an issue exists between the parties as to                                
                  whether taxpayers realized income or gains as a result                                  
                  of their investment,                                                                    
                        WHEREAS, the parties wish to determine with                                       
                  finality the treatment for Federal income tax purposes                                  
                  of any losses incurred and the amount, if any, of                                       
                  income and gains realized by taxpayers as a result of                                   
                  their investment in Securities Arbitrage Co.                                            
                  partnership.                                                                            
                        NOW IT IS HEREBY DETERMINED AND AGREED, for                                       
                  Federal income tax purposes that:                                                       
                        1.     Taxpayers are not entitled to deductions,                                  
                  losses or credits nor are they required to report                                       
                  income or gains as a result of their investment in                                      
                  Securities Arbitrage Co. partnership except as provided                                 
                  herein.                                                                                 
                                     *   *   *   *   *   *   *                                            
                        3.     As a result of the investment in Securities                                
                  Arbitrage Co. partnership, taxpayers are entitled to                                    
                  deductions or losses as follows:                                                        
                                     *   *   *   *   *   *   *                                            



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