2
partnership administrative adjustment (FPAA) to Maged F. Riad, as
tax matters partner for Whitman & Ransom (W&R), determining
adjustments to W&R’s Form 1065, U.S. Partnership Return of Income
(partnership return) for 1996. A timely petition for a
readjustment of the partnership items for 1996 was filed pursuant
to section 6226(a).1 The issues for decision are whether W&R may
deduct, as guaranteed payments, adjustments made to eliminate the
negative capital account balances of individual partners who had
withdrawn from W&R, and whether Arthur M. Handler (Handler) was a
partner in W&R during 1996.
FINDINGS OF FACT
The parties submitted this case fully stipulated pursuant to
Rule 122. The stipulation of facts, the supplemental stipulation
of facts, and the attached exhibits are incorporated herein by
this reference. We find the stipulated facts accordingly.
W&R was established in 1919 under the laws of New York as a
general partnership engaged in the practice of law. From 1993
through 1996, W&R had its principal place of business in New
York, New York. From 1993 through 1996, Maged F. Riad was the
tax matters partner of W&R.
1 All Rule references are to the Tax Court Rules of Practice
and Procedure, and all section references are to the Internal
Revenue Code, as amended. Amounts are rounded to the nearest
dollar.
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