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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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