ACM Partnership, Southampton-Hamilton Company, Tax Matters Partner - Page 5

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          with the partners' interests in the partnership.  In view of our            
          disposition of the first issue, we need not and do not decide the           
          validity of this allocation.                                                
               Unless otherwise indicated, section references are to the              
          Internal Revenue Code in effect for the years at issue, and Rule            
          references are to the Tax Court Rules of Practice and Procedure.            
          Throughout this Opinion, we use the terms "purchase", "sale",               
          "contingent installment sale", and "contingent payment sale"                
          solely for purposes of convenience and clarity.  Our use of these           
          terms is not meant to give legal significance to the underlying             
          and surrounding transactions.                                               
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated.  The stipulations of           
          fact and attached exhibits are incorporated herein by this                  
          reference.  When the petition was filed, ACM's principal place of           
          business was in Wilmington, Delaware.                                       
          1.  The Contingent Installment Sale Transaction                             
               ACM is one of 11 partnerships (section 453 partnerships)               
          formed over a 1-year period from 1989 to 1990 by the Swap Group             
          at Merrill Lynch & Co., Inc.1  Each section 453 partnership was             
          intended to be a vehicle for sheltering capital gains of one of             
          its partners.  For purposes of this Opinion, the principal                  

               1 During the period at issue, Merrill Lynch & Co., Inc., was           
          a holding company that, through subsidiaries and affiliates,                
          provided various financial services.  We use the name "Merrill"             
          to refer generally to the affiliated group or a member thereof.             




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