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provisions were not partnership items4 but were affected items.5
We observed that determination of affected items must await “the
outcome of the partnership proceeding” but held that we had
jurisdiction in that case, stating:
However, the “outcome of the partnership
proceeding” may be acceptance of the partnership return
as filed as a result of the fact that there was no
partnership proceeding and there can no longer be a
partnership proceeding under the normal statute of
limitations. We do not read section 6230(a)(2)(A)(i)
to mean that a partnership proceeding must be opened
and closed in order for there to be a determination
with regard to an affected item. We also find no
requirement in the statute or regulations that
prohibits affected items from being considered in a
proceeding involving a personal tax case, providing
subject matter jurisdiction exists. [Id. at 860-861.]
Petitioners direct us to our more recent opinion in Katz v.
Commissioner, 116 T.C. 5, 8-9 (2001), in which we stated:
4See sec. 6231(a)(3), which provides:
SEC. 6231(a). Definitions.--For purposes of this
subchapter--
* * * * * * *
(3) Partnership item.--The term “partnership
item” means, with respect to a partnership, any
item required to be taken into account for the
partnership’s taxable year under any provision of
subtitle A to the extent regulations prescribed by
the Secretary provide that, for purposes of this
subtitle, such item is more appropriately
determined at the partnership level than at the
partner level.
5See sec. 6231(a)(5), which provides: “The term ‘affected
item’ means any item to the extent such item is affected by a
partnership item.”
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