category of assets making up the Washington properties was as
follows:
Timber & timberland $31.0 million
Development property 10.5 million
Port Ludlow community 4.5 million
Port Gamble townsite 2.5 million
and tree nurseries
$48.5 million
The $1.5 million in cash transferred to the Partnership was
not included in the assets that we valued. Furthermore, we did
not consider, nor did we intend to include, any portion of the
working capital in determining the fair market value of the
Washington properties. Respondent's Rule 155 computation
correctly treats the $1.5 million of working capital as being
separate from the Washington properties that we valued in Pope &
Talbot II.
Allocation of Expenses
In Pope & Talbot II, we found that petitioner incurred
$1,364,071 in expenses relating to the formation of the
Partnership, the transfer of the Washington properties, and the
distribution of the partnership units. The overall purpose of
these activities was to distribute the Washington properties. We
held that petitioner may offset its expenses incurred in
connection with the distribution against its section 311(d) gain.
We did not find that these expenses related to either the
transfer of the cash or the separate sale of the installment
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