Republic Plaza Properties Partnership, PFI Republic Limited, Inc., Tax Matters Partner - Page 17

                                       - 17 -                                         

               In the Federal partnership return that Partnership filed for           
          1988, it did not accrue any rent under the lease agreement.                 
                                       OPINION                                        
               Petitioner bears the burden of proving that respondent's               
          determinations in the FPAA are erroneous.  Rule 142(a); Welch v.            
          Helvering, 290 U.S. 111, 115 (1933).                                        
               On brief, the parties agree that the lease agreement is a              
          section 467 rental agreement, as defined in section 467(d), and             
          that therefore Partnership is subject to section 467.  Section              
          467 provides in pertinent part:                                             
               (b) ACCRUAL OF RENTAL PAYMENTS.--                                      
                    (1) ALLOCATION FOLLOWS AGREEMENT.--Except as                      
               provided in paragraph (2), the determination of the                    
               amount of rent under any section 467 rental agreement                  
               which accrues during any taxable year shall be made--                  
                         (A) by allocating rents in accordance with                   
                    the agreement, and                                                
                         (B) by taking into account any rent to be                    
                    paid after the close of the period in an amount                   
                    determined under regulations which shall be based                 
                    on present value concepts.                                        
                    (2) CONSTANT RENTAL ACCRUAL IN CASE OF CERTAIN TAX                
               AVOIDANCE TRANSACTIONS, ETC.--In the case of any sec-                  
               tion 467 rental agreement to which this paragraph                      
               applies, the portion of the rent which accrues during                  
               any taxable year shall be that portion of the constant                 
               rental amount with respect to such agreement which is                  
               allocable to such taxable year.                                        
                    (3) AGREEMENTS TO WHICH PARAGRAPH (2) APPLIES.--                  
               Paragraph (2) applies to any rental payment agreement                  
               if--                                                                   
                         (A) such agreement is a disqualified                         




Page:  Previous  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  Next

Last modified: May 25, 2011