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thereafter reporting that it had acquired HCMP’s business,
assets, and liabilities. According to respondent, Collins may
not unilaterally disavow his other partners’ view that HCMP had
terminated during 1998, nor the fact that HCMP’s business
operation is now being reported by another taxpayer. We find
respondent’s focus misplaced. Simply because a managing partner
acts unilaterally to dissolve a partnership, to zero out the
partnership assets and liabilities, and to report to the
Commissioner that the partnership has been terminated does not
mean that the partnership has terminated for Federal tax
purposes. Nor is it critical to our decision that HCMP is no
longer reporting the marina business as its own. What is
important to us is that the parties to the HCMP partnership
agreement had agreed that the marina would be sold by HCMP in the
case of a dissolution, that basic tax principles establish that
any income or loss on such a sale must be reported by HCMP, and
that such a sale by or on behalf of HCMP may reasonably occur in
a year after 1998.
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