IPO II, A Partnership, Gerald R. Forsythe, Tax Matters Partner - Page 8

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          and, therefore, none of the liability was allocable to Indeck               
          Overseas.4                                                                  
               On September 11, 2002, petitioner filed a Petition for                 
          Readjustment of Partnership Items Under Code Section 6226 with              
          the Court for a redetermination of the adjustments set forth in             
          the FPAA.  Petitioner alleged, inter alia, that respondent erred            
          in the determination that the liability shown on the respective             
          Schedules K-1 for the years in issue is fully allocable to Mr.              
          Forsythe, and in no part to Indeck Overseas.                                
                                     Discussion                                       
          I.   Burden of Proof                                                        
               As a preliminary matter, petitioner argues that respondent’s           
          “primary” position, i.e., that the liability reflected on the               
          Schedules K-1 is nonrecourse, is entitled to the presumption of             
          correctness, and respondent bears the burden of going forward               
          with evidence and the burden of persuasion on the “alternative”             
          position; i.e., that the liability is recourse and fully                    
          allocable to Mr. Forsythe.                                                  
               We do not find that the resolution of this case depends on             
          which party has the burden of proof.  On the basis of evidence in           
          the record, we hold that the recourse liability is fully                    


               4  Respondent initially determined in the FPAA that the                
          liability listed on the Schedules K-1 from the purchase of the              
          aircraft was a nonrecourse liability, and alternatively                     
          determined that the liability was recourse and fully allocable to           
          Mr. Forsythe.  Respondent has since conceded that this liability            
          was recourse.                                                               




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