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On March 1, 2001, respondent issued a notice of deficiency
to petitioners for their 1997 tax year. Respondent determined
that Mr. Gustin’s adjusted basis in Annona was $36,000 and
disallowed loss deductions from Annona that were claimed on
petitioners’ Form 1040 to the extent those deductions exceeded
$36,000. See sec. 704(d). The section 6229(a) period of
limitations for making adjustments to Annona partnership items
expired on April 15, 2001, after the notice of deficiency was
issued. Petitioners filed their petition on April 19, 2001.
Annona was subject to the unified partnership procedures of
sections 6221-6234, but respondent did not conduct a partnership-
level examination of Annona’s 1997 partnership return.
Respondent acknowledges that a notice of final partnership
administrative adjustment (FPAA) will not be issued for Annona
and that there will be no adjustments to any partnership items of
Annona for 1997.
The unified partnership procedures were added to the Code as
part of the Tax Equity and Fiscal Responsibility Act of 1982,
Pub. L. 97-248, sec. 401(a), 96 Stat. 648.2 Under those
procedures, the tax treatment of items of partnership income,
loss, deductions, and credits is determined in partnership-level
proceedings rather than in separate proceedings involving the
2The unified partnership procedures have been amended since
their effective date of Sept. 3, 1982, and those procedures are
now contained in secs. 6221 through 6234.
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