- 4 -
responsibilities. The partnership continued to employ the
services of a public accounting firm.
In September 1986, Dasco purchased approximately 6 acres of
undeveloped real property (the property) in Orange County,
Florida, for $537,500. The property was purchased with proceeds
from the sale of other property contributed to the partnership by
Segrest. In October 1992, Dasco received $857,413 from the State
of Florida as a result of a condemnation sale of the property to
the State. Dasco elected to defer recognition of the gain from
the condemnation sale according to the provisions of section 1033
and, therefore, did not report the gain on its U.S. Partnership
Return of Income (Form 1065) for 1992.
The partnership used the proceeds from the condemnation sale
to pay partnership debt. In 1995, Segrest, in his role as in-
house bookkeeper, informed the partnership's public accountant
that the partnership had never purchased replacement property and
would therefore have to file an amended return for 1992. The
amended return was prepared by the public accountant and was
signed by Segrest. In a Schedule K-1, Partner's Share of Income,
Credits, Deductions, Etc., which was attached to the 1992 amended
return, the partnership reported that petitioner's share of the
gain was $165,000.
Petitioner knew that the property was sold as a result of
the condemnation, and that if the partnership did not purchase
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011