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interests in the partnerships have been stipulated and have been
received into evidence. For the first year, respondent allocated
a portion of the partnership debt, which consisted of the reduced
amount of the notes to Ranches, to each of the partners who
assumed personal liability. The allocation was based on the
original percentages of partnership liabilities assumed as
reflected in the partnership books and records. The resulting
amounts represented each partner's beginning capital account
balance. Each year respondent adjusted these balances for actual
capital contributions made to the partnership and increases 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 partnership books and records and on the
Federal income tax returns filed by the partnerships throughout
the taxable years at 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,
Shorthorn Genetic Engineering 1984-5, have also been stipulated
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