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that the partners were entitled to only 50 percent of the
partnership’s profits each and were not entitled to any amounts
based on the new agreement. On October 16, 2002, the jury found
for petitioner “with regard to the partnership between January 1,
1996 through December 31, 1998"; i.e., the income of the
partnership should be allocated according to the new agreement.
Although petitioner received a favorable jury verdict, as of the
time of the submission of the parties’ moving papers in the
instant case, the partnership receipts remained in escrow pending
the Massachusetts Superior Court’s decision on petitioner’s
motion for an accounting.
Respondent determined a $41,338 deficiency based on the
$121,000 reported to petitioner on his Schedule K-1 and mailed
petitioner a notice of deficiency on May 14, 2004. Petitioner
timely petitioned this Court. After petitioner provided
respondent an income analysis of the partnership’s income for
1998 during discovery, respondent increased the deficiency to
$53,077. Using the income analysis petitioner provided,
respondent determined petitioner’s distributive share under the
new agreement was $151,682.
2(...continued)
stolen by Mr. Cohen. Respondent deducted the stolen deposits
from the calculation of the increased deficiency.
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Last modified: May 25, 2011