- 6 - income among the partners in proportion to their contributions to the partnership under the bankruptcy plan. The total contribution by all partners was $38,962,594. Petitioner’s second COD income allocation of $10,233 was calculated by dividing his $15,000 contribution by the total of all partner contributions, $38,962,594, and then multiplying the result by the remaining COD income, $26,580,484 (15,000/38,962,594 = .03849 percent x $26,580,484).4 In order to explain fully the two-step process, respondent attached to his response to petitioners’ objection to his computation a spreadsheet titled “IRS Closing Agreement” that reflects the computation of the COD income allocation to petitioner using the two-step process described above. Neither party introduced the closing agreement or the spreadsheet into evidence during the trial of the case. The following adjustments (the adjustment items) to petitioners’ income listed on respondent’s Form 4549A-CG, Income Tax Examination Changes, reduce petitioners’ taxable income by $1,199: (1) Capital loss of $18, (2) Finley Kumble interest 4The computation shows the second allocation amount is $10,231, which is $2 less than the $10,233 allocation claimed by respondent. The discrepancy could be caused by mistakes in amounts recited in respondent’s response. This computational discrepancy is minimal and harmless and does not change our decision.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011