- 14 -
applied; otherwise a limited partner's liability would apply as
each installment of the Limited Recourse Note became due).
Petitioner's Decision To Invest
On November 1, 1985, petitioner executed subscription
documents to purchase one-half of one unit in the partnership,
for which he paid a total of $20,000 cash over the period from
November 1985 through June 1987.9 Pursuant thereto, petitioner
was required to, and did, therefore, assume personal liability
for his pro rata portion of the Limited Recourse Note in the
amount of $57,289.
Procedural Background
Respondent issued two Notices of Final Partnership
Administrative Adjustment (the FPAA's) to the partnership for the
tax years 1985 and 1986 on April 20, 1992. On July 17, 1992, the
partnership filed a petition with this Court challenging the
correctness of the FPAA, but making no claim that it was not
timely. That case was captioned Hambrose Leasing v.
Commissioner, under docket No. 16262-92 (Hambrose II).
On September 1, 1992, this Court issued its opinion in a
related case, pertaining to the 1984 tax year, Hambrose Leasing
v. Commissioner, 99 T.C. 298 (1992) (Hambrose I). In Hambrose
I, this Court held that the issue of whether a partner is at risk
9 Petitioner paid $4,600 cash on Nov. 1, 1985, and signed an
Investor Note in the amount of $15,400, which he paid on over the
following 2 years.
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