IPO II, A Partnership, Gerald R. Forsythe, Tax Matters Partner - Page 16

                                       - 16 -                                         
          this section (which defines related person)”.  The related                  
          partner exception overrides the application of section 267(b)(11)           
          and section 1.752-4(b)(1), Income Tax Regs.  Pursuant to the                
          related partner exception, this “relationship” between Indeck               
          Overseas and Mr. Forsythe is severed for purposes of determining            
          whether Indeck Overseas bears an economic risk of loss for any of           
          IPO II’s recourse liability.                                                
               We conclude that Indeck Overseas and Indeck Energy are not             
          related parties for purposes of determining whether Indeck                  
          Overseas bore any economic risk of loss with regard to IPO II’s             
          liability for the aircraft because:  (1) Indeck Overseas is not             
          related to Mr. Forsythe pursuant to the related partner                     
          exception; and (2) Indeck Overseas is related to Indeck Energy              
          only through Mr. Forsythe, and that relationship is not                     
          recognized for purposes of our determination.  To hold otherwise            
          would be to allow attribution of economic risk of loss indirectly           
          even though it cannot be attributed directly.  In the instant               
          case involving a recourse liability, the shifting of economic               
          risk of loss to achieve an increased basis cannot be accomplished           
          through attribution.  Therefore, we hold that none of the                   
          recourse liability incurred by IPO II with respect to the                   
          purchase of the aircraft is allocable to Indeck Overseas.                   
               We have considered all of the parties’ contentions,                    
          arguments, and requests that are not discussed herein, and we               






Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011