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T.C. 198, 203 (1987).
4. Relevant Partnership Item Inquiry
The parties believe that our jurisdiction in this case turns
on whether the bankruptcy regulation operates upon the
prepetition partnership losses. Respondent argues that the
regulation converts the prepetition partnership losses from
partnership items to nonpartnership items, while petitioners
contend that such losses fall outside the scope of the
regulation. We, however, believe that the jurisdictional issue
before us is more appropriately resolved on other grounds.
Respondent does not challenge the propriety of the prepetition
partnership losses. Rather, respondent contends only that those
losses should have been reported by Mr. Katz’ bankruptcy estate
as opposed to Mr. Katz in his individual capacity. Thus, even if
we assume that the bankruptcy regulation does not operate to
convert the prepetition partnership losses to nonpartnership
items,5 we are left with the issue of whether the manner in which
partnership items are allocated between a partner in bankruptcy
and the partner’s bankruptcy estate is a determination which,
pursuant to the TEFRA procedures, must be made at the partnership
level. We therefore shall determine our jurisdiction based on
the resolution of this latter issue.
5 As the determination of whether the bankruptcy regulation
converts the prepetition partnership losses to nonpartnership
items is not necessary to our decision, we leave that
determination for another day.
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