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obligated to transfer to the partnership up to $100,000 to
reimburse the partnership for costs of the improvements. During
1989, the partnership received from Peoria $99,946 to make the
improvements to Store 5.
In November of 1989, petitioner leased for a period of
10 years from the College Park Partnership (College Park) a
portion of a building for Store 6. Under terms of the lease,
petitioner was obligated to make certain capital improvements to
the building, and College Park was obligated to transfer to
petitioner up to $70,000 to reimburse petitioner for costs of the
improvements. During 1989, petitioner received $56,921 from
College Park to make the improvements to Store 6.
In 1989, Store 5 and in early 1990 Store 6 were opened and
conducted business, and it appears from the evidence that the
required improvements to the buildings were made and that the
above funds were received from Peoria and from College Park by
the partnership and by petitioner as reimbursement for costs of
the improvements.
During 1990, petitioner received $8,465 from College Park to
make improvements to Store 6.
On the partnership's and on petitioners' 1989 income tax
returns, the $99,946 the partnership received from Peoria in 1989
to make improvements to Store 5 was not reflected as income of
the partnership. Also, on petitioners’ joint Federal income tax
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