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income. Pursuant to section 707, a partner shall include in his
taxable year guaranteed payments which are made to him in a
partnership taxable year ending with or within that taxable year.
Sec. 1.706-1, Income Tax Regs.
An examination of paragraphs 3, 6, and 8 reveals that the
items in those paragraphs are calculated based on, or are a
reference to, Securities' partnership income and deductions for
the stated years. Thus, these paragraphs do not specifically
cover the guaranteed payments petitioners received in 1980 and
1981 (except to the extent deduction of the guaranteed payment
resulted in a larger loss or a reduction in income for the
partnership in 1980 and 1981, respectively).
In conclusion, we find that no ambiguity exists in the
Securities Closing Agreement. The language of the agreement is
clear, and paragraph 7 requires petitioners to include the
guaranteed payments as ordinary income in the years received.
Consequently, we shall not look past the "four corners" of the
document to interpret paragraph 7 in the manner that petitioners
urge.
To the extent we have not addressed petitioners' other
arguments, the Court finds them to be without merit.
To reflect the foregoing,
An appropriate order
will be issued.
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Last modified: May 25, 2011