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sale of the Property allocated to the partners on the Schedules
K-1 exceeds the applicable amount in each case.) Also, we note
that for purposes of the alternative minimum tax under section
56, section 56(b)(1)(A)(ii) disallows any taxes described in
paragraph (1), (2), or (3) of section 164(a). (The record does
not contain the income tax returns of the partners, so the
applicability of the alternative minimum tax in individual cases
is unknown.)
Petitioner argues that the rollback taxes paid by the
partnership should simply be treated as a reduction in the amount
realized on the sale of the Property, since the rollback taxes
were incurred and paid solely as a negotiated condition of the
sale. Petitioner points out that the parties stipulated that the
payment of the rollback taxes was a requirement of the sale
imposed by the buyer, Pulte Home, and that without this
requirement the rollback taxes would not have been incurred at
the time of sale. Petitioner suggests that the rollback taxes
which were paid should not be treated as a tax at all, but rather
as a cost of sale which reduced the amount realized. Beyond this
unamplified suggestion, petitioner bases his entire argument on
the position that the rollback tax is not a tax on real property
for purposes of section 164(a)(1).
Respondent disagrees that the rollback taxes paid by SLR
should be treated as a reduction in the amount realized on the
sale. Instead, respondent argues that the rollback taxes are
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