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Commissioner, T.C. Memo. 2000-382. See Rule 161, Tax Court Rules
of Practice and Procedure. In Dynadeck Rotary Sys. v.
Commissioner, supra, the facts and holding of which are
incorporated herein by this reference, we sustained respondent’s
determination that the Partnership had no debt during 1991 and
1992 that would allow its partners to increase their bases in the
Partnership under section 752(a). In so doing, we rejected
petitioner’s argument that $400,000 owed to the Laurel Assets
Group (LAG), an unrelated investment group, was a Partnership
debt that increased each partner’s basis in the Partnership for
those years. Petitioner acknowledged that LAG transferred the
$400,000 directly to Dynadeck Rotary Systems Incorporated
(Corporation), a partner in the Partnership, and that the
underlying promissory note listed the Corporation as the obligor.
Petitioner asserted that the Corporation received the $400,000 as
the Partnership’s agent. We stated:
The facts of this case do not establish that the
Partnership was ever liable to repay any of that [the
$400,000] amount. The sole evidence that we find in
the record as to a debtor/creditor relationship is the
promissory note which provides clearly that the
Corporation owed the money to LAG. The note says
nothing, nor is there evidence, to support petitioner’s
claim that the Corporation executed that note as the
Partnership’s agent or that the Partnership was liable
for the note’s repayment. Nor is there any evidence of
a written agreement identifying the Corporation as the
Partnership’s agent, or evidence that the Corporation
was held out as the partnership’s agent in dealings
with LAG or another third party. See Commissioner v.
Bollinger, 485 U.S. 343, 349-350 (1988).
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