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that under Mississippi law he was a partner after December 31,
1990.4 Hence, for Federal tax purposes, petitioner is deemed to
have retired from the partnership on December 31, 1990.
Petitioner claims that he was entitled to a liquidating
distribution in 1990 which he never received and which could not
have been discovered from the firm's financial records until their
completion in 1991. Thus, he asserts he is entitled to recognize
a tax loss in 1991. Petitioner's argument must fail. Although
petitioner may have believed he was entitled to a liquidating
distribution in exchange for his partnership interest, the fact is
he never received one in 19915 nor was he entitled to one. Indeed,
Luther Thompson, a partner in Heidelberg & Woodliff during
petitioner's tenure with the firm, testified that the firm's
partnership agreement, as amended in the late 1980's, did not
4 Mississippi law provides that retiring partners may
seek an accounting of their interests in their former
partnerships. Miss. Code Ann. secs. 79-12-83, 79-12-85 (1989).
5 Heidelberg & Woodliff's Schedule K-1 issued to
petitioner indicates that petitioner's share of partnership
liabilities at the end of 1990 was $69,756. Luther Thompson, a
partner at Heidelberg & Woodliff, testified that he could not
vouch for the accuracy of that figure because it was handwritten
and not typewritten like the remainder of the schedule. To the
extent petitioner was relieved of partnership liabilities, such
would constitute a distribution of money to petitioner by the
partnership and hence a deemed liquidating distribution at the
end of 1990. Sec. 752(b); see O'Brien v. Commissioner, 77 T.C.
113 (1981); Pietz v. Commissioner, 59 T.C. 207 (1972); Stilwell
v. Commissioner, 46 T.C. 247 (1966).
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