L&C Springs Associates, Solomon A. Weisgal Investment Associates, Tax Matters Partner, et al. - Page 18

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            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                         




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