Interhotel Company, Ltd. - Page 26




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          those figures with substantial amounts of minimum gain chargebacks          
          for both 1990 and 1991.  As a first step, petitioner contends that          
          if all of IHCL’s assets had been liquidated at the end of 1990--the         
          year prior to the taxable year--the net liquidation proceeds would          
          have been $16,328,755.  This amount is computed as follows:                 
               Assets                                                                 
               Cash                          $7,955,796                               
               Unamortized organization costs     39,388                              
               Investment in Pacific Gateway      2,328,218                           
               Investment in Pacific Landmark     (1,358,431)                         
               Liabilities                         (6,193)                            
              Subtotal                 8,958,778                                     
               1990 Minimum gain chargeback       7,369,977                           
               Distributable liquidation                                              
               proceeds at book value 1/1/91      16,328,755                          
               Petitioner contends that $5,920,614 of the minimum gain                
          chargeback would be used first to eliminate THEI’s negative capital         
          account.  The $1,449,353 balance of the minimum gain chargeback             
          would then be allocated pursuant to the IHCL Restated Agreement as          
          it was in effect during 1990.  Thus, 85 percent (or $1,231,959)             
          would be allocated to THEI and 15 percent (or $217,404) would be            
          allocated to Dondi.  These allocations, when added to the partners’         
          capital accounts, yield a positive capital account of $1,231,959            
          for THEI and $15,096,769 for Dondi.  Together, they reflect total           
          partnership capital of $16,328,755--the amount of the previously            
          identified liquidation proceeds.                                            








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