- 2 -
Held: All of the liability is allocable to F
because IO cannot be related to F or to IE for purposes
of determining the allocation of the recourse liability
pursuant to sec. 1.752-4(b)(2)(iii), Income Tax Regs.
David J. Duez, Thomas C. Borders, and Ann M. Chavie, for
petitioner.
Jason W. Anderson, for respondent.
OPINION
HAINES, Judge: Respondent issued a notice of final
partnership administrative adjustment (FPAA) to Gerald R.
Forsythe, as tax matters partner (TMP) for IPO II, determining
adjustments to IPO II’s Federal tax returns for 1998 and 1999
(years in issue). For clarification purposes, we shall refer to
Gerald R. Forsythe in his capacity as TMP as petitioner; we shall
refer to Gerald R. Forsythe in his capacity as owner of IPO II
and the other entities described below as Mr. Forsythe.
After concessions,1 the issue for decision is whether any of
the recourse liability incurred by IPO II with respect to the
1 The parties provided the following stipulations: (1)
IPO II is not entitled to claim a deduction for salaries and
wages of $104,000 for each of the years in issue; and (2)
respondent concedes that IPO II correctly reported the principal
business activity as “Chartering Airplane”, the principal product
or service as “Chartering Airplane”, the Business Code number,
and the loss from said activity as an ordinary loss from trade or
business activities. As a result, respondent conceded that IPO
II correctly reported ordinary losses from said activity of
$1,385,457 in 1998 and $752,824 in 1999.
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