-30-
In making its point, petitioner uses the same figures as
respondent. Petitioner augments those figures, however, with
substantial amounts of minimum gain chargebacks for both 1990 and
1991. First, petitioner contends that if all of IHCL's assets had
been liquidated at the end of 1990, the net liquidation proceeds
would have been $16,328,755. This amount is computed as follows:
Assets
Cash $7,955,796
Organization costs 39,388
Investment in Pacific Gateway 2,328,218
Investment in Pacific Landmark (1,358,431)
Liabilities (6,193)
Subtotal 8,958,778
1990 Minimum gain chargeback
from Pacific Landmark1 7,369,977
Distributable liquidation
proceeds at book value 1/1/91 16,328,755
1 Petitioner's figures include only minimum gain
chargebacks traceable to the PLH partnership. Apparently, S.D.
Hotels, one of PGL's partners, guaranteed the payment of PGL's
obligation to Home Savings. This guaranty restricted use of PGL's
nonrecourse deductions to S.D. Hotels, which bore the economic risk
of loss on the property. See sec. 1.704-1T(b)(4)(iv)(h)(2),
Temporary Income Tax Regs., 53 Fed. Reg. 53164 (Dec. 30, 1988).
Petitioner then contends that $5,920,614 of the minimum gain
chargeback would be used first to eliminate THEI's negative capital
account. The balance of the minimum gain chargeback, plus the
liquidation proceeds, would then be distributed pursuant to the
IHCL Restated Agreement as it was in effect during 1990. Thus,
according to petitioner, 85 percent, or $1,231,959, would be
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