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believes he is entitled to a $60,000 loss deduction.3
All of the properties with respect to which petitioner
sustained losses were partnership interests. In general, the
adjusted basis of a partner's interest in a partnership equals
the amount of money and the adjusted basis of property
contributed by the partner to the partnership, increased by the
partner's distributive share of partnership income and certain
other amounts, and decreased by distributions and the sum of the
partner's distributive share of partnership losses and certain
other expenditures. Sec. 705(a). Petitioner's contentions
notwithstanding, there is no provision in the Code allowing a
partner a stepped-up basis in his partnership interest as a
result of its being pledged as collateral. Thus, we reject
petitioner's argument that the basis of each partnership interest
was equal to its fair market value.4
Petitioner next argues, in the alternative, that
respondent's computation of basis is wrong in any event. First,
petitioner argues that respondent improperly relied on the
Schedules K-1 in computing basis. Second, petitioner argues that
respondent double counted IDC in making that computation.
3 At trial, petitioner also argued that he was entitled to a
loss deduction of $40,000 -- the difference between the $100,000
loan secured by the Dime Box No. II, Dime Box No. III, and CAG
Farmout partnership interests and the $60,000 fair market value
of those interests at foreclosure. On brief, petitioner merely
maintains that the loss is equal to $60,000.
4 For the same reason, we reject petitioner's argument at
trial, identified supra note 3, that his loss was equal to
$40,000.
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