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between Malibu Cedars and the IRS reflecting this concession.1 The
closing agreement was signed on behalf of Malibu Cedars by “Khalil
Hamdan, H.P.D. Latigo”. On May 29, 1997, the Court entered a
stipulated decision reflecting the concession.2
Profit Participation Fee
As of December 31, 1989, the records of HPD-Latigo reflected
an accounting entry for a $300,000 account payable to HPD, and the
records of HPD reflected a corresponding accounting entry for a
$300,000 account receivable from HPD-Latigo; both of these
accounting entries related to a “profit participation fee”.
The purported reason for the $300,000 profit participation fee
was to compensate HPD for services (legal, accounting, and
consulting) rendered to HPD-Latigo, including services rendered
prior to HPD-Latigo’s incorporation. Petitioners perceived HPD-
Latigo to be their “investment arm” and HPD as the “operating arm”
for HPD-Latigo.
1 The closing agreement provided that Malibu Cedars,
Ltd., was not required to include in its 1992 income $432,600,
representing developers’ fees that had been accrued and deducted
in 1989 but never paid.
2 Petitioners request that we revisit the issues involved
in that case. We decline to do so. See, e.g., Stanko v.
Commissioner, T.C. Memo. 1996-530. The doctrine of res judicata
precludes relitigation of the issues involved therein. Moreover,
the items at issue herein are those of the partner, HPD-Latigo,
not those of the partnership, Malibu Cedars. Consequently, we
have no jurisdiction to redetermine any adjustment to Malibu
Cedars’ partnership return. See Sente Inv. Club Partnership v.
Commissioner, 95 T.C. 243, 247 (1990).
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