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and decreases in liabilities assumed. These adjusted balances
were used to determine the proportionate share of partnership
items to be allocated to each partner. The capital account
balances were then adjusted to reflect the partnership items so
allocated and these balances were carried over to the next year.
All of the partners included in respondent's proposed
decision documents had personally assumed partnership liabilities
as reflected in the partnerships' books and records and on the
Federal income tax returns filed by the partnerships throughout
the taxable years in issue. Furthermore, petitioner agrees that
respondent's calculations are consistent with the books and
records of the partnerships.
Several documents relating to one of the partnerships,
Poison Creek Ranches #1, have also been stipulated to and
received into evidence. The partnership was formed as a limited
partnership under the laws of the State of Nevada in 1980.
The partnership agreement provides in pertinent part:
2. Each Limited Partner's interest in his share of the
Partnership assets, profits and losses shall be the
proportion which his capital contribution bears to the
aggregate capital contributions of all Limited Partners.
* * *
* * * * * * *
(a) The right to expel any Limited Partner who may fail or
refuse to pay into the capital of the Partnership the entire
amount of his subscription within thirty (30) days after its
due date, or who may attempt to participate in or interfere
in any way with the management of the Partnership's affairs,
is hereby expressly reserved to the General Partner in its
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