- 23 -
for 1989 and 1990. Since no adjustment was made during the
partnership-level proceeding as to the character of the activity,
respondent is bound by the reporting position of the Partnership.
See Doe v. Commissioner, 80 AFTR2d 97-5535, 97-1 USTC par. 50460
(10th Cir. 1997), affg. in part and revg. in part T.C. Memo.
1993-543; Roberts v. Commissioner, 94 T.C. at 862.
Having concluded that the Partnership reported its losses as
arising from trade or business activity, we think it ineluctable
that the characterization of such losses as active or passive in
the hands of petitioners is not a partnership item within the
meaning of section 6231(a)(3) and the accompanying regulations.
Determining whether or not petitioners materially participated in
such activity for purposes of section 469 has no effect on any
item that would affect all of the partners' respective returns,
nor does it have any effect on any item on the Partnership's
return or on the Partnership's books and records. See Roberts v.
Commissioner, 94 T.C. at 861.
B. The section 469 issue involves an affected item
requiring a partner-level factual determination.
We now turn to consider respondent's alternative position
set forth in the amended answer that the section 469 issue
involves an affected item such that section 6229(a) and (d)
applies to suspend the period of limitations. Sec.
6230(a)(2)(A)(i).
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