-52-
(2003); McGovern, “Liabilities of the Firm, Member Guaranties,
and the At Risk Rules: Some Practical and Policy Considerations”,
7 J. Small & Emerging Bus. L. 63, 81 (Spring 2003) (“Section 465
[more specifically identified in a footnote as section
465(c)(2)(B)] provides that if equipment leasing is carried on by
a partnership or subchapter S corporation, all items of equipment
that are placed in service during the same taxable year are
treated as constituting a single activity.”); Pennell, “Separate
Treatment of At-Risk Activities Under Section 465 Delayed”, 62 J.
Taxn. 372 (1985) (“For that category [section 1245 property],
aggregation based on the taxable year the properties were placed
in service is allowed under the special rule in Section
465(c)(2)(B).”). We have not found (nor have petitioners cited)
any treatise or article that sets forth a contrary
interpretation.
C. At-Risk Amounts
Petitioners argue that the deficit capital account
restoration provision in the revised LCL operating agreement
exposed LCL’s members to liability for their respective shares of
LCL’s recourse debt. Respondent argues that this provision was
not operative during the relevant years because it required that
an LCL member first liquidate its interest in LCL, an event that
never occurred during the relevant years. Respondent argues
alternatively that the provision, if operative, did not make the
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