ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 27

                                                    - 27 -27                                                      

             attributable to the sale of the PPNs and LIBOR notes) and various                                    
             fees (i.e., Merrill Lynch's legal, accounting, and various                                           
             financial services fees).                                                                            
                    Barber and Dominguito collectively contributed $990 million                                   
             to ASA and ultimately received $1,046,720,226.  The                                                  
             $1,046,720,226 consisted of:  $540,600,000 from AlliedSignal's                                       
             August 2, 1990, purchase of all of Barber's, and a portion of                                        
             Dominguito's, interests; $168,860,297 from redemptions of                                            
             Dominguito's interest; $331,543,679 in income and property                                           
             distributions to Barber and Dominguito; and $5,716,250 in direct                                     
             payments from AlliedSignal to Barber, Dominguito, and ABN.  ABN                                      
             ultimately received all payments to Barber and Dominguito.  In                                       
             addition, ABN received $5,851,355 from its swap transactions.                                        
             XIII.  Respondent's Determinations                                                                   
                    On September 27, 1996, respondent issued the FPAA.  In the                                    
             FPAA, respondent disallowed the capital gain, portfolio income,                                      
             portfolio expenses, and a portion of the basis in the LIBOR notes                                    
             reported by ASA.  Respondent reallocated 90 percent of such items                                    
             to AlliedSignal and 10 percent of such items to ASIC.                                                
                    In the FPAA, respondent contends that ASA is not a valid                                      
             partnership and that Barber and Dominguito are not partners.  As                                     
             an alternative position, respondent contends that the                                                
             transactions lack economic substance.  Respondent further states                                     
             that if this contention is sustained, "no gain will be realized                                      





Page:  Previous  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  32  33  34  35  36  Next

Last modified: May 25, 2011