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Ridge Energy filed a Form 1065, U.S. Partnership Return of
Income for calendar year 1983 (partnership return), on August 9,
1984, prepared by Peter J. Amsterdam, a partner of Mr. Coscia.
In the partnership return, Ridge Energy claimed a loss of
$98,900, which consisted of $96,000 in leasing expenses, $2,800
in management fees, and $100 in attorney fees. Ridge Energy also
claimed a basis of $1,485,000 for investment tax credit purposes
in the energy management system leased from Saxon Energy.
Petitioner's allocable shares of losses and investment tax credit
basis flowing from Ridge Energy for 1983 were $5,219 and $78,370,
respectively, as reported on Schedule K-1, Partner's Share of
Income, Credits, Deductions, etc.
On August 6, 1987, respondent issued a Notice of Final
Partnership Administrative Adjustment (FPAA) to the tax matters
partner for Ridge Energy in which respondent disallowed the
losses and investment tax credit basis claimed by Ridge Energy on
the partnership return. Ridge Energy and two of its partners
filed a petition with this Court contesting the adjustments made
by the FPAA in Ridge Energy Systems, Nicholas J. and Sandra
Coscia, Partners Other Than the Tax Matters Partner v.
Commissioner, docket No. 413-88. On March 11, 1994, this Court
entered a decision under Rule 248(b) sustaining respondent's
disallowance of the losses and investment tax credit basis
reported by the Ridge Energy for its 1983 taxable year.
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