Interhotel Company, Ltd. - Page 27




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               As a second step, petitioner maintains that a liquidation of           
          all of IHCL’s assets at the end of 1991--the taxable year--would            
          yield proceeds of $17,887,056.  This amount is computed as follows:         
               12/31/91 Deemed Liquidation                                            
               Cash                          $9,098,388                               
               Organization costs                 39,388                              
               Note receivable from THEI          2,619,833                           
               Investment in Pacific Gateway      2,660,677                           
               Investment in Pacific Landmark     (3,967,304)                         
               Liabilities                        (    1,847)                         
               Subtotal                 10,449,135                                    
               1991 Minimum gain chargeback       7,437,891                           
               Distributable liquidation                                              
               proceeds at book value                                                 
          12-31-91                        17,887,026                                  
          This $17,887,026 amount is $1,558,301 more than that for 1990,              
          the prior year. This increase consists of an additional $67,914 in          
          minimum gain chargebacks generated during 1991, plus partnership            
          income for 1991 of $1,490,387.  The total minimum gain would first          
          be used to eliminate THEI’s negative capital account of $5,920,614.         
          The balance of $1,517,277 would be distributed  in accordance with          
          the partnership agreement--that is, 99 percent to Dondi and 1               
          percent to THEI until June 20, 1991, when 100 percent would be              
          allocated to THEI.                                                          
               Respondent’s figures, showing a comparison of the partners’            
          capital accounts that reflect minimum gain chargebacks, are as              
          follows:                                                                    








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