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Respondent has also determined increased interest under
section 6621(c).1
The main issues for decision are: (1) Whether petitioners
were “protected against loss” within the meaning of section
465(b)(4) with respect to their pro rata share of partnership
debt obligations arising from sale-leaseback transactions engaged
in by a partnership, and (2) whether additions to tax under
sections 6653(a) and 6661(a) and increased interest under section
6621(c) are applicable.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and attached exhibits are incorporated
herein by this reference. Petitioners both resided in California
when they filed the petition in the instant case.
Petitioners timely filed joint Federal income tax returns
for the taxable years 1985 and 1986. Petitioners deducted losses
and investment interest expenses (the claimed deductions)
relating to Hambrose Leasing 1985-4 (the partnership) in the
following amounts:
Year Loss Investment Interest
1985 $27,985 $1,107
1986 45,689 14,916
1 All section references are to the Internal Revenue Code
in effect for the years in issue. All Rule references are to the
Tax Court Rules of Practice and Procedure.
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