P.D.B. Sports, Ltd., Bowlen Sports, Inc., Tax Matters Partner - Page 1

                                   109 T.C. No. 20                                    

                               UNITED STATES TAX COURT                                

                      P.D.B. SPORTS, LTD., BOWLEN SPORTS, INC.,                       
                         TAX MATTERS PARTNER, Petitioner v.                           
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 730-96.               Filed December 22, 1997.              
                    An individual purchased more than a 50-percent                    
               interest in a partnership, that owned and operated a                   
               professional sports franchise.  Partnership's presale                  
               basis in player contracts was 6X.  Because more than 50                
               percent of Partnership's ownership had changed, P                      
               contends that sec. 708, I.R.C., causes a termination                   
               and triggers the partnership basis provisions causing a                
               stepped-up basis (to fair market value) in the player                  
               contracts to 36X.  Partnership claimed amortization                    
               deductions using the 36X basis.  R contends that sec.                  
               1056, I.R.C., applies and would limit the amortizable                  
               basis in the player contracts, even though the                         
               contracts were acquired through purchase of an interest                
               in a partnership.  Alternatively, R contends that if                   
               sec. 1056, I.R.C., does not apply to partnership                       
               transactions involving sports franchises, the                          
               partnership's basis would be less than claimed under                   
               subch. K partnership provisions.                                       
                    Held:  Sec. 1056, I.R.C., does not apply to this                  
               partnership transaction involving a sports franchise.                  

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