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In the December 16, 1999, letter, Kaufman also attempted to
justify the $196,923 deduction at issue in this case. In that
letter, he stated:
The only adjustment amount is that the cost basis of
the deduction should be reduced to the following
mathematical total:
A. 27.625% of $544880 or the sum of approximately
$150,000
B less $58,941 taken in item 2 above [the deduction
claimed by Jack H. Kaufman, APC for abandonment of
client files and goodwill]
C result is approximately $92,000 rather than 196,923
It is taxpayer’s position that the debt assumption was
substantially attributable to intangible property
rights, i.e., goodwill and client list/files
These statements indicate that Jack H. Kaufman, APC and
petitioner each received a portion of the debt assumed by Kaufman
in connection with the dissolution of the partnership, and each
owned some of the intangible assets received by Kaufman in
connection with the dissolution of the partnership. The proposed
adjustment reflects that the deduction claimed by petitioner is a
partial duplication of that claimed by Jack H. Kaufman, APC. On
brief, however, petitioner states:
No duplicate deduction was taken since the
abandonment losses taken on other entity returns at or
about the same time were for abandonment of other
assets than goodwill acquired by Petitioner from the
law partnership distribution in 1986 though [sic]
predecessors in interest.
Petitioner offers no explanation for this inconsistency.
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