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the loss was allocated to RD Leasing and 2 percent to EICI. The
loss allocated to RD Leasing was included in Norwest’s 1993
consolidated return.
Andantech filed a Form 1065 for the tax year ending December
31, 1994. On Schedule L of the return, Andantech reported
$22,378,210 as liability on mortgages, notes, and bonds payable in
1 year or more. On Schedule K of the return, Andantech reported a
$50,069,397 loss attributed to a $48,150,200 depreciation deduction
and $1,919,197 interest deduction. Andantech reported no gross
income from other rental activity. Andantech reported on Schedules
K-1 that 98 percent of the loss was allocated to RD Leasing and 2
percent to EICI. The loss allocated to RD Leasing was included in
Norwest’s 1994 consolidated return.
XII. Respondent’s Determinations
A. FPAAs for the 1993 Short Years
On January 14, 2000, respondent issued a notice of final
partnership administrative adjustments (FPAA) regarding Andantech’s
12/10/93 short period (the 12/10/93 FPAA). On January 14, 2000,
respondent also issued an FPAA regarding Andantech’s 12/31/93 short
period (the 12/31/93 FPAA).16
Respondent determined that Andantech’s claimed 12/10/93 short
16 As explained hereinafter, respondent contends that
there is only one 1993 taxable period for Andantech and that
there was no termination of the partnership on Dec. 10, 1993.
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