Aron B. Katz and Phyllis A. Katz - Page 15




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          have no effect on the remaining partners.  The subdivision of               
          partnership tax items between the two related but independently             
          taxed entities is thus not a determination “required to be taken            
          into account for the partnership’s taxable year” as contemplated            
          by section 6231(a)(3).                                                      
               5.   Conclusion as to Jurisdictional Issue                             
               We hold that the manner in which the distributive share of a           
          partner in bankruptcy is allocated between the partner in his               
          individual capacity and his bankruptcy estate is not a                      
          partnership item under the TEFRA procedures.  Accordingly, the              
          merits of such an allocation need not be resolved in a                      
          partnership-level proceeding, but rather may be resolved in a               
          proceeding at the partner level such as the present one.10                  
          Petitioners’ motion to dismiss for lack of jurisdiction shall be            
          denied.                                                                     
          B.   Parties’ Cross-Motions for Summary Judgment                            
               The parties have each moved for summary judgment with                  
          respect to whether the prepetition partnership losses were to be            
          reported by Mr. Katz or his bankruptcy estate.  Summary judgment            
          may be granted only if it is demonstrated that no genuine issue             
          exists as to any material fact and that a decision may be entered           

               10  We note that our holding is consistent with Gulley v.              
          Commissioner, T.C. Memo. 2000-190, which addressed in a partner-            
          level proceeding the proper allocation of partnership losses                
          between a taxpayer in bankruptcy and the taxpayer’s bankruptcy              
          estate.  The jurisdictional issue, however, was not addressed in            
          that case.                                                                  




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