L&C Springs Associates, Solomon A. Weisgal Investment Associates, Tax Matters Partner, et al. - Page 16

                                               - 16 -                                                 
            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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