Denis Brody and Carol Brody - Page 7

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                  It is Petitioners [sic] contention that the                         
                  872-A executed by the parties is clear and                          
                  ambiguous [sic] on its face and therefore must                      
                  be strictly construed in accordance with its                        
                  own terms.                                                          

                  The thrust of petitioners' argument is that respondent              
             is legally precluded from adjusting petitioners' income to               
             correct their share of the losses reported from Thunderbird              
             because BDB was not specifically mentioned in the consent,               
             and petitioners did not directly own an interest in                      
             Thunderbird.  We answered petitioners' argument in Brody I               
             as follows:                                                              
                       Petitioners' only claim is that the omission                   
                  of any reference to BDB in the consent forecloses                   
                  any adjustment to their share of the losses of                      
                  Thunderbird after the general period of limita-                     
                  tions expired because they did not directly own                     
                  an interest in Thunderbird.  Petitioners'                           
                  argument simply begs the question of what was                       
                  intended by the parties as objectively determined                   
                  from the language used in the consent.  The fact                    
                  that petitioners did not directly own an interest                   
                  in Thunderbird means nothing different in the                       
                  context of interpreting the consent than it meant                   
                  in the context of petitioners' income tax return.                   
                  Petitioners deducted losses from Thunderbird on                     
                  their return, in accordance with their partner-                     
                  ship interest in BDB, and the consent is clearly                    
                  intended to cover partnership items from                            
                  Thunderbird.  It is also clear that is precisely                    
                  what was intended by the Commissioner.                              
                       Furthermore, had the consent specifically                      
                  named BDB, as petitioners claim is necessary, it                    
                  would have been a different agreement with                          
                  broader legal effect than the subject consent.                      
                  In that case, any partnership item flowing from                     
                  BDB into petitioners' return, not just partner-                     
                  ship items from Thunderbird, would have been                        




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