-32-
the previously identified liquidation proceeds available for 1991.
Distributions would be made in accordance with the IHCL Restated
Agreement as it read at the end of 1991. Petitioner asserts that
because the second amendment precluded Mr. Manchester from
receiving any net income for 1991, THEI, the only other partner in
IHCL, would be allocated 100 percent of such income.
E. Does the Comparative Liquidation Test Contemplate a
Liquidation of the Lower Tier Partnerships?
The difference between respondent's and petitioner's theories
of the comparative liquidations arises from petitioner's contention
that a deemed liquidation of IHCL must also involve a deemed
liquidation of PLH and PGL (the lower tier partnerships) and the
resulting minimum gain chargebacks.
Under the facts of this case, however, we do not believe that
the comparative liquidation test permits a deemed liquidation of
IHCL to include a deemed liquidation of PLH and PGL.
Section 704 provides that we must determine the interests of
the partners in accordance with all relevant facts and
circumstances. IHCL had a 35.354-percent interest in each of the
lower tier partnerships. As a limited partner with only a minority
interest in each of the lower tier partnerships, IHCL could not
control the lower tier partnerships. Thus, it could not force
partnership minimum gain chargebacks by requiring PLH and PGL to
dissolve or to dispose of their property in a way that caused a
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