- 25 -
which did own such properties. IHCL’s ownership of interests in
these lower tier partnerships is, in effect, a proportionate
ownership interest in the properties of those lower tier
partnerships as well. In this regard, petitioner points to the
regulations governing allocation of nonrecourse deductions, which
expressly provide a “look-through” rule for situations involving
tiered partnerships. Petitioner then posits that for purposes of
the nonrecourse deductions, the “look-through” rule is designed to
produce the same consequences for the upper tier partnership (here,
IHCL) that would have resulted had IHCL directly held its
proportionate share of the properties owned by Gateway and
Landmark. Petitioner concludes that under these regulations, had
Landmark or Gateway incurred minimum gains on the disposition of
their property, IHCL would be required to realize its proportionate
share of those gains. See sec. 1.704-1T(b)(4)(iv)(j), Temporary
Income Tax Regs., 53 Fed. Reg. 53166 (Dec. 30, 1988).
Continuing, petitioner asserts that a deemed liquidation of
IHCL under the comparative liquidation test would imply a deemed
liquidation of Landmark and Gateway as well, and hence, a sale of
their hotel properties. The result of the disposition of those
properties would trigger minimum gain chargebacks to Landmark and
Gateway, and through them, a proportionate share to IHCL.
Petitioner’s application of the comparative liquidation test
uses the same figures as respondent. However, petitioner augments
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011