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cannot be recharacterized as passive, and that Ps are
entitled to, among other things, refunds for
overpayments as well as net operating losses for those
years based on favorable adjustments at the partnership
level for 1989 and 1990. R objects to Ps' motion.
Both Ps and R moved to amend their respective pleadings
pursuant to Rule 41, Tax Court Rules of Practice and
Procedure.
1. Held: Ps' motion for leave to file amendment
to petition and R's motion for leave to file amendment
to answer are granted. Rule 41(a), Tax Court Rules of
Practice and Procedure.
2. Held, further, Ps' motion for summary judgment
denied; the statutory period of limitations does not
preclude R's recharacterization of Ps' distributive
share of partnership losses for 1989 and 1990 as
passive losses subject to the limitations set forth in
sec. 469, I.R.C. Secs. 6229(a) and (d),
6230(a)(2)(A)(i), I.R.C.
Kevin M. Bagley and Mitchell B. Dubick, for
petitioners.
Gretchen A. Kindel, for respondent.
OPINION
NIMS, Judge: This matter is before the Court on the
following three motions: (1) Petitioners' Motion for Leave to
File Amendment to Petition pursuant to Rule 41(a); (2)
respondent's Motion for Leave to File Amendment to Answer
pursuant to Rule 41(a); and (3) petitioners' Motion for Summary
Judgment filed pursuant to Rule 121.
Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the years at
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