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financing was $1,350,000 as of December 31, 1998. Third, HCMP
reported on Collins’s 1998 Schedule K-1 as to an analysis of his
capital account that his share of net income per books, other
increases, and other decreases totaled $1,017,332. Collins
reported on the Form 8082 that these items totaled $3,449 because
“THE AMOUNT REPORTED ON THE K-1 IS DUE TO AN INVOLUNTARY
TERMINATION OF THE PARTNER’S INTEREST. THE TAXPAYERS WILL NOT BE
REPORTING ANY GAIN AMOUNT, IF APPLICABLE, UNTIL THE FINAL OUTCOME
OF THIS CASE.” Fourth, HCMP reported on Collins’s 1998 Schedule
K-1 that his withdrawals and distributions for that year totaled
$389,662, or more specifically, the amount listed on that return
as a cash distribution made to him during that year. Collins
reported on the Form 8082 that he had not received any
distribution or withdrawal during 1998 in that the “CHECK
RECEIVED BY TAXPAYER WAS TRANSFERRED TO THE CLERK OF THE SUPERIOR
COURT OF SAN DIEGO PENDING FINAL SETTLEMENT OF THE CASE”.
Collins’s fourth cause of action in the lawsuit sought
declaratory relief. Collins moved the trial court for summary
judgment as to this issue, as did the Sunroad defendants. The
trial court on August 11, 1999, issued an order granting
Collins’s motion and denying the motion of the Sunroad
defendants. Previously, the trial court had ruled that Sunroad
Asset had dissolved HCMP as of May 26, 1998, and that Sunroad
Asset’s distribution of HCMP’s assets was improper in that the
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