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thereafter filed an amended 1998 partnership tax return, which it
dated October 22, 1999. During the taxable years at issue, SMP
reported Mr. Lerner, Rockport Capital, Somerville S Trust,
Generale Bank, and CLIS as having varying interests in SMP’s
profits, losses, and ownership of capital.
On its 1997 tax return, SMP reported that the adjusted basis
of the $974 million in receivables from Generale Bank was
$974,296,601; that the adjusted basis of the $79 million
receivable was $79,912,955; and that the adjusted basis of the
SMHC stock was $665 million. On its 1998 return, SMP reported
that the adjusted basis of one portion of the $974 million in
receivables was $81,590,418; that the adjusted basis of the
remaining portion was $512,793,227; and that the adjusted basis
of the SMHC stock was $665 million.
On Schedule D, Capital Gains and Losses, of its 1997
partnership tax return, SMP reported its sales of the $150
million (face value) notes receivable to TroMetro, and its sales
to Imperial of 14.8 and 79.2-percent interests in Corona. As
described in more detail supra, SMP reported a long-term capital
loss of $147,486,000 on its sale of the receivable; a short-term
capital loss of $11,647,367 with respect to the sale of the 14.8-
percent Corona interest; and a long-term capital loss of
$62,237,061 with respect to the sale of the 79.2-percent Corona
interest.
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