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of Bowlen's purchase, Bowlen I owned the following assets: the
NFL franchise for the Broncos, professional football player
contracts, a stadium lease, and television rights. Bowlen I's
adjusted basis in the player contracts on May 31, 1984, before
the sale of the partnership interests to Bowlen II, was
$6,510,555.4
Bowlen I treated the sale of the partnership interest to
Bowlen as causing a section 708(b)(1)(B) termination of the
partnership for Federal tax purposes. Adams consented to the
transfer of Kaiser's partnership interests to Bowlen and entered
into a new partnership agreement with Bowlen II in order to
prevent dissolution of the partnership under State law. The
Broncos franchise, held by Bowlen I, was not separately for sale.
The parties' transactions were in form and substance the sale of
partnership interests as opposed to a sale of the underlying
partnership assets.
A list of players, whose contracts existed at the time that
Bowlen acquired his interest, was used to determine the value of
the player contracts. During June 1984, the Broncos' general
manager contacted four individuals, including general managers
and/or individuals responsible for negotiating player contracts
4 The parties stipulated that the partnership had an
adjusted basis in the player contracts on May 31, 1984, in the
amount of $6,328,656; however, an exhibit reflects an adjusted
basis of $6,510,555. Respondent relied on the amount shown in
the exhibit on brief without objection by petitioner. We use the
$6,510,555 amount for purposes of this opinion.
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