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thereof. The issue for decision is whether the resulting
discharge of indebtedness income is excludable from petitioners’
1995 gross income pursuant to section 108.1 We hold that it is.2
Background
The parties submitted this case fully stipulated pursuant to
Rule 122. The stipulations of the parties, with accompanying
exhibits, are incorporated herein by this reference.
When petitioners filed their petition, they resided in
Fallston, Maryland.
The Partnership’s Debts
At all relevant times, petitioner was a general partner in
Notchcliff Associates (the partnership), a Maryland general
partnership that was engaged in the business of developing a
continuing care facility.
On April 9, 1985, the partnership borrowed $18 million from
The Commercial Bank (the bank) for use in its business. On that
same date, petitioner and other general partners of the
partnership executed a personal guaranty agreement, whereby they
1 Unless otherwise indicated, section references are to the
Internal Revenue Code for the taxable year at issue, and Rule
references are to the Tax Court Rules of Practice and Procedure.
2 Essentially identical issues are presented in three other
cases also decided today: Chester L. Price, docket No. 6639-02;
Jose Martinez, Deceased, docket No. 6641-02; and Jose and Nancy
Gracia, docket No. 6642-02.
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