- 28 -
Dondi/
Date THEI Manchester Total
12-31-91 $2,092,861 $15,794,195 $17,887,056
12-31-90 minus 1,231,959 15,096,796 16,328,755
Increase 860,902 697,399 11,558,301
1 These figures do not take into account a dispute over an
adjustment in IHCL’s ordinary income for 1991 of $16,402, an issue
which we address infra p. 41.
Respondent concludes that, because a deemed liquidation would
produce the above results, its allocation of all the net income to
THEI after June 20, 1991, reflects the partners’ interests in the
partnership.
The Issue Revisited
The contrast between respondent’s and petitioner’s theories of
the comparative liquidations arises from petitioner’s contention
that a deemed liquidation of IHCL must also involve a deemed
liquidation of Landmark and Gateway and the resulting minimum gain
chargebacks.
In our initial examination of this issue, we agreed with
respondent. In Interhotel I, we held that IHCL, as a minority
owner of Landmark and Gateway, lacked the legal capacity to force
Landmark and Gateway to dispose of the property that generated the
nonrecourse deductions. Accordingly, upon liquidation, IHCL could
only dispose of its partnership interests in Landmark and Gateway.
Those partnerships, however, would continue to own the hotel
properties. In the absence of some other event that triggered
minimum gain chargebacks (such as a repayment of the principal of
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