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petitioners’ deductions of partnership losses were limited to
petitioners’ bases in the partnerships. On the basis of our
opinion in Maxwell v. Commissioner, 87 T.C. 783 (1986),
respondent concedes that we lack jurisdiction over petitioners’
1998 and 1999 tax years because ongoing partnership-level
proceedings, see secs. 6221-6234, have not been completed with
respect to partnerships that gave rise to deficiencies for those
years. The issue remaining for decision is whether we have
jurisdiction to redetermine a deficiency for petitioners’ 1997
tax year. Petitioners resided in Berkeley, California, at the
time they filed their petition.
In 1997, Mr. Gustin invested in a partnership called Annona
Venture (Annona). He made a cash contribution of $50,000 and
also contributed a recourse subscription note of $157,800. Mr.
Gustin was a general partner in Annona.
The 1997 partnership return filed by Annona included a
Schedule K-1, Partner’s Share of Income, Credits, Deductions,
etc., which reported items relating to Mr. Gustin. Line F of the
Schedule K-1 entitled “Partner’s share of liabilities” contains
no entry. Line J entitled “Analysis of partner’s capital
account” shows “Capital contributed during year” by Mr. Gustin of
$193,800. The Schedule K-1 shows Mr. Gustin’s share of losses as
$189,138. Petitioners deducted that amount on their Form 1040,
U.S. Individual Income Tax Return, for 1997.
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