Shorthorn Genetic Engineering 1982-2, Ltd., Shorthorn Genetic Engineering 1982-4, Ltd., Shorthorn Genetic Engineering 1982-5, Ltd., Walter J. Hoyt III, Tax Matters Partner, et al. - Page 12

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          As a result, petitioner argues that these partners have no                  
          partnership interest.                                                       
               Respondent argues that the Court has jurisdiction to                   
          determine the allocation of items at issue in these cases because           
          the items are partnership items.  Respondent contends that in               
          order to determine the allocations to be made to the partners who           
          have not settled on an individual basis, it is necessary for the            
          Court to consider the capital accounts of all of the partners.              
          Respondent argues that the provisions of the Tax Equity and                 
          Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 402(a),             
          96 Stat. 324, 648 are procedural, and affect only the type of               
          proceeding which may be brought, but do not alter the substantive           
          law of partnerships.  Thus, respondent argues, the provisions do            
          not have the effect of removing partners from the partnership.              
               The items at issue fall within the definition of partnership           
          items.  The determination of the allocation of partnership items            
          to the parties to this action requires that we consider the                 
          partnership aggregate of each item, including partnership                   
          capital.  A partner's interest in each item is determined based             
          on the share of total partnership capital contributed by the                
               The effect of a partner's accepting the out-of-pocket                  
          settlement is that the partner and respondent have agreed on the            
          treatment of the partner's share of partnership items for Federal           

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