Life Care Communities of America, Ltd., A Florida Limited Partnership, Robert W. McMichael, A Partner Other Than The Tax Matters Partner - Page 5

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               On April 18, 1990, petitioner was released from liability              
          relating to the loan.  On October 11, 1990, Smith and Fowler                
          filed with the Florida Department of State a Certificate of                 
          Amendment To Limited Partnership removing petitioner as general             
          and limited partner.                                                        
               The partnership issued petitioner Schedules K-1 (Form 1065,            
          Partner’s Share of Income, Credits, Deductions, Etc.), which                
          reflected petitioner's distributive share of partnership items,             
          relating to 1989 and 1990.  Petitioner, however, excluded such              
          items after January 12, 1989, from his Federal income tax returns           
          for those years.  On June 27, 1994, respondent sent an FPAA,                
          relating to 1989 and 1990, to Smith as tax matters partner of the           
          partnership.  Smith did not file a petition for readjustment of             
          partnership items pursuant to section 6226(a).  On August 8,                
          1994, respondent sent an FPAA, relating to 1989 and 1990, to                
          petitioner, which determined that petitioner transferred                    
          ownership in the partnership on June 30, 1990, rather than                  
          January 12, 1989, and that he was, therefore, a partner whose               
          distributive share included partnership income accrued through              
          June 30, 1990.                                                              
               Respondent also determined that petitioner was liable for              
          the income tax accrued through June 30, 1990, on his pro rata               
          share of FMS and the management company’s income.  Following                
          respondent’s determination, petitioner paid the income taxes                

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