Hugh and Linda Janow - Page 8

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            reported a $20,000 guaranteed payment and a partnership ordinary                              
            loss of $130,260.  Turning to the statutory notice of deficiency,                             
            we find that respondent made a substantial adjustment to the                                  
            partnership ordinary loss claimed by petitioners.  No adjustment                              
            was made to the $20,000 guaranteed payment.                                                   
                  Ultimately, the parties executed a Form 906.  The first                                 
            "WHEREAS" clause refers to a dispute "with respect to the                                     
            taxability of the taxpayer's distributive share of gains or                                   
            losses from [Federal] arising from security trading transactions                              
            * * *".  The second "WHEREAS" clause states, that the parties                                 
            wish to determine "all of the federal income tax consequences of                              
            the taxpayers' interest in the partnerships".  Reading these                                  
            clauses, together with the remainder of the Closing Agreement,                                
            leads us to conclude that the specific adjustments agreed upon                                
            relate only to partnership adjustments.  Thus, the $21,822                                    
            allowable loss is to be deducted from the claimed $130,260, which                             
            results in an adjustment of $108,438.  This is respondent's                                   
                  Petitioners argue that the Closing Agreement should be                                  
            interpreted to exclude the $20,000 guaranteed payment which                                   
            petitioner received in 1980 and which petitioners reported on                                 
            their 1980 return. Petitioners' arguments are based on the                                    
            premise that the absence of any specific provision in the Closing                             
            Agreement covering the $20,000 guaranteed payment necessarily                                 

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