-2--2-
P’s were partners of the Raiders, a professional
football team that received municipal funds repayable
only from specific sources of revenue. The partnership
also received funds from settlement of a lawsuit
brought by the City of Oakland.
1. Held: Amounts received from the Los Angeles
Memorial Coliseum Commission as “loans”, to be repaid
from revenue received from luxury suites, are taxable
when received, because the obligation to repay was not
unconditional.
2. Held, further, damages received from the City
of Oakland were not allocated to goodwill or franchise
value and are thus taxable.
3. Held, further, income from discharge of
indebtedness resulted when the agreement to build a
stadium in the City of Irwindale became unenforceable.
Bad debt issue also resolved.
Barrie Engel, for petitioners.
David W. Sorensen and Paul L. Dixon, for respondent.
COHEN, Judge: Respondent determined deficiencies in
Sheldon R. and Phyllis Milenbach’s Federal income taxes as
follows:
Docket No. 28514-92
Year Deficiency
1980 $2,749
1981 1,822
1982 4,499
Respondent issued notices of Final Partnership Administrative
Adjustments (FPAA’s) determining adjustments to partnership items
as follows:
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Last modified: May 25, 2011