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Finley Kumble FPAA issued on August 10, 1998, or the extensions
of the period of limitations granted by Mr. Manley as TMP of
Finley Kumble.
We Have Jurisdiction To Determine How Mr. Blonien’s Share of
Finley Kumble’s Partnership Items Will Affect Petitioners’ Income
Tax Liability
While we lack jurisdiction in this proceeding to consider
petitioners’ argument that Mr. Blonien was not a partner or to
review the allocation to Mr. Blonien of shares of partnership
items, we have jurisdiction to consider whether assessment of a
deficiency against petitioners is barred by the statute of
limitations, and whether respondent correctly determined
petitioners’ tax liability on the basis of the allocation made to
Mr. Blonien at the partnership level.
Under TEFRA, after the allocation to the partners of
partnership items is determined at the partnership level, the
partners’ individual tax liabilities must be determined. This is
done by way of “computational adjustments” and “affected items”,
two terms of art under TEFRA. According to section 6231(a)(5)
and (6):
The term “affected item” means any item to the extent
such item is affected by a partnership item.
The term “computational adjustment” means the change in
the tax liability of a partner which properly reflects
the treatment under this subchapter of a partnership
item. * * *
In GAF Corp. v. Commissioner, 114 T.C. at 523, we stated:
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