- 3 -
forth adjustments to the partnership’s tax return for its taxable
year ended December 31, 1992. Respondent subsequently mailed a
copy of the FPAA to FPL Group, Inc. (FPL or petitioner), a Salina
notice partner. FPL, in its capacity as a partner other than the
TMP, filed a timely petition for readjustment contesting the FPAA.1
See sec. 6226(b).
The issue for decision is whether the partnership realized a
short-term capital gain of $344,234,365 for the taxable year ended
December 31, 1992.2 (The situation presented in this case is one
in which “normal” roles of the parties appear to be reversed
inasmuch as FPL is defending Salina’s reporting of the $344 million
gain against respondent’s assertion that Salina realized a short-
term capital gain of only $334,214.) Respondent’s determination is
based on alternative grounds, including arguments that: (1) FPL’s
purchase of a 98-percent partnership interest in Salina was a sham
in substance; and (2) Salina erred in failing to apply section 752
in computing its substituted basis (from its partners) in its
assets.
1 The parties stipulated that venue for purposes of
appeal is to the U.S. Court of Appeals for the Eleventh Circuit.
See sec. 7482(b)(2).
2 The parties agree that if petitioner prevails, the
amount of the partnership’s interest income is $700,713 for the
period in question, whereas if respondent prevails, the amount of
the partnership’s interest income is $147,252.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011