Foothill Ranch Company Partnership, Buck Equities, Ltd., Tax Matters Partner - Page 1

                                   110 T.C. No. 8                                     

                               UNITED STATES TAX COURT                                

                        FOOTHILL RANCH COMPANY PARTNERSHIP,                           
               BUCK EQUITIES, LTD., TAX MATTERS PARTNER, Petitioner v.                
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 26341-95.               Filed February 9, 1998.             
                    P is the tax matters partner of a partnership                     
               comprised of four other partners.  Two of the                          
               partnership's partners are partnerships.  P filed a                    
               motion for reasonable litigation costs pursuant to sec.                
               7430, I.R.C., and contended that R was not                             
               substantially justified in determining that petitioner                 
               was not entitled, pursuant to sec. 460, I.R.C., to use                 
               the percentage of completion method of accounting.                     
                    1.  Held:  R's position, relating to whether P was                
               entitled to use PCM, was not substantially justified.                  
                    2.  Held, further, first-tier partners that meet                  
               the net worth requirements of sec. 7430, I.R.C., are                   
               eligible to receive an award.                                          
                    3.  Held, further, a partner in a TEFRA                           
               partnership proceeding may receive an award for                        
               litigation costs that are paid or incurred by the                      
               partnership only to the extent such fees are allocable                 
               to that partner.                                                       

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