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is whether the resulting discharge of indebtedness income is
excludable from 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 petitioner filed his petition, he 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: Ralph J. and Joan B. Mirarchi, docket
No. 6638-02; Jose Martinez, Deceased, docket No. 6641-02; and
Jose and Nancy Gracia, docket No. 6642-02.
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Last modified: May 25, 2011