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abandonment of L&C Springs’ ownership interest in the L&C
Properties.
On L&C Springs' books and records for 1990 and 1991 and on
L&C Springs' 1990 and 1991 Federal partnership income tax
returns, rental income relating to the L&C Properties was
reported only up until November 1, 1990. After November 1, 1990,
only Cal Fed received and reported rental income from the L&C
Properties.
On November 15, 1991, final closing entries were made in L&C
Springs' books and records, and the L&C Springs partnership was
apparently dissolved as of that date.
From the date of the initial investment by L&C Springs in
the L&C Properties, the investors in L&C Springs received tax
advice from Kanter that upon any sale, foreclosure, or
abandonment of L&C Springs' interest in the L&C Properties income
would be realized by L&C Springs in connection with the discharge
of L&C Springs' $2,250,000 debt obligation to Tanglewood.
For L&C Springs' short taxable year January 1 to
November 15, 1991, a Federal partnership income tax return on
behalf of L&C Springs was filed on which was reported a taxable
gain under sections 1001, 1231, 1245, and 1250 relating to the
termination of L&C Springs' leasehold interest in the L&C
Properties. Based on that gain, total distributive income to the
general and limited partners of L&C Springs was reported on L&C
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