- 3 - Petitioners filed joint Federal income tax returns for 1985 and 1986. On their returns, petitioners claimed deductions of loss and investment interest expense (the claimed deductions) relating to Hambrose Leasing 1985-3 (the partnership) in the following amounts: Year Loss Investment Interest Expense 1985 $13,903 $1,082 1986 21,538 2,190 This case involves two sale-leaseback transactions among the following entities: CIS Leasing Corp. (CIS), a New York corporation with principal offices in Syracuse, New York; Comdisco, Inc. (Comdisco), a Delaware corporation with principal offices in Rosemont, Illinois; Charterhouse Leasing Associates Limited Partnership (Charterhouse), a Connecticut limited partnership; Hambrose Reserve Ltd. (Hambrose), a Delaware corporation; M & J Holding Corp. (M & J), a Delaware corporation that was the sole shareholder of Hambrose and the general partner of Charterhouse; and Hambrose Leasing 1985-3 (the partnership), a partnership engaged in the equipment leasing business. The Sale-Leaseback Transactions The transactions can be described in general terms as follows: CIS and Comdisco purchased IBM computer equipment with a specified amount of borrowed funds. CIS and Comdisco then leased the computer equipment to various end users. CIS and Comdisco then sold the computer equipment to Charterhouse,Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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