- 4 -
proposed increasing Mr. Manchester’s reported distributive share of
IHCL’s net income for 1991 by $814,296. As a consequence of this
determination, respondent determined that Mr. Manchester should be
subject to adjustments for alternative minimum tax and tax
preference items totaling $23,490. The issue for decision on
remand is whether the allocation of all of IHCL’s income to THEI
possessed economic substance or was made in accordance with the
partners’ interests in IHCL.
Background
We incorporate herein the findings of fact set forth in
Interhotel Co., Ltd. v. Commissioner, T.C. Memo. 1997-449
(Interhotel Co. I) by this reference. For convenience, we shall
summarize the relevant facts in Interhotel Co. I. We also
incorporate herein the stipulations and exhibits in Interhotel Co.
I by this reference.
Unless indicated otherwise, all section references are to the
Internal Revenue Code in effect for the year in issue, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
Prior to 1985, Mr. Manchester formed two limited partnerships,
Pacific Landmark Hotel, Ltd. (Landmark), and Pacific Gateway, Ltd.
(Gateway), to construct, own, and manage two hotel facilities at
the San Diego convention center. The two partnerships financed the
1(...continued)
in the amount of $2,228, instead of $51,433, as reported. The
parties resolved these issues prior to trial.
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