Jose Gracia and Nancy Gracia - Page 6

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          this purpose.  Giving due regard to principles of judicial                  
          comity, we discern no reason to second-guess the bankruptcy                 
          court’s assertion of jurisdiction over petitioner in the                    
          partnership’s chapter 11 bankruptcy case.  See 28 U.S.C. secs.              
          151, 157, 1334 (2000).                                                      
               We conclude that petitioner’s debts in question were                   
          discharged “in a title 11 case” within the meaning of section               
          108(d)(2).  Accordingly, we hold that petitioner’s discharge of             
          indebtedness income is excludable from gross income pursuant to             
          section 108(a)(1)(A).                                                       
               We have considered all arguments raised by the parties.                
          Arguments not addressed herein are moot, irrelevant, or without             
          merit.                                                                      
               To reflect the foregoing,                                              
                                                  Decision will be entered            
                                             for petitioners.                         





















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