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claim for partial worthlessness in their pleadings, nor did they
seek leave to amend their pleadings to raise the issue. The
parties never consented to try such issue during the trial. This
alternative argument, therefore, is not properly before the
Court.
Issue 22. Whether Respondent Correctly Made Adjustments to the
Rental Income, Depreciation, Interest Expense, and Investment Tax
Credits Claimed by Investment Research Associates, Ltd. (IRA) in
Connection with Equipment Leasing Transactions for 1979, 1980,
and 1982 Through 1989
FINDINGS OF FACT
I. Background and Adjustments Made in Deficiency Notices
A. IRA and Cedilla Investment
IRA and its subsidiary Cedilla Invest. (hereinafter
sometimes referred to collectively as IRA) engaged in various
equipment leasing transactions involving the sale and leaseback
of computer and related equipment beginning in 1976 and
continuing through 1987. Although the parties disagree on who
owned the various classes of stock in Cedilla Invest., and it
appears the stock ownership in Cedilla Invest. varied over the
years, the parties agree that for the years at issue, IRA held
directly or indirectly at least 80 percent of Cedilla Invest.'s
(...continued)
Inc. v. Commissioner, 126 F.2d 588 (2d Cir. 1942), affg. a
Memorandum Opinion of this Court. On their 1987 return, the
Kanters claimed no bad debt deductions under sec. 166(a)(2) for
partial worthlessness of these various promissory notes. Rather,
they claimed loss deductions under sec. 165 from their sales of
the notes to other parties.
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