- 18 -
L&C Properties and that L&C Springs realized discharge of
indebtedness income relating thereto. Respondent also disallowed
L&C Springs' accrued interest expense and depreciation expense
deductions that were claimed on L&C Springs' 1987 Federal
partnership income tax return.
At docket No. 13915-91, L&C Springs filed a petition with
this Court contesting the above partnership adjustments made by
respondent with respect to L&C Springs for 1987. After
negotiations between the parties, respondent conceded each of the
above adjustments for 1987. On February 18, 1993, a decision was
entered by this Court in docket No. 13915-91 reflecting the above
settlement of the parties and ordering that the partnership items
of L&C Springs be accepted as claimed on L&C Springs' Federal
partnership income tax return for 1987.
As explained, for 1988, 1989, and 1990, respondent issued
protective FPAA’s charging L&C Springs with the same $2,250,000
in income on the ground that, in either 1988, 1989, or 1990 L&C
Springs effectively abandoned or transferred to Tanglewood its
ownership interest in the L&C Properties and that such
abandonment or transfer triggered a realization of the full
$2,250,000 principal amount of the L&C Springs’ debt obligation
to Tanglewood. On brief, respondent concedes that the $2,250,000
should be reduced by L&C Springs’ adjusted tax basis of its
ownership interest in the L&C Properties. Respondent also
disallowed L&C Springs' accrued interest expense and depreciation
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011