-113-
membership interest to Imperial at a substantial loss. Under
section 704(c), Imperial succeeded to SMP’s inside basis in the
$79 million receivable. When the $79 million receivable was sold
to TroMetro, Imperial (and to some extent SMP) was allocated the
substantial loss from that sale, effectively duplicating the loss
that SMP had realized on the sales of its Corona membership
interest.
II. Burden of Proof
Generally, in actions to redetermine respondent’s
partnership-level adjustments in an FPAA, as in other actions in
this Court, the burden of proof is on petitioner, unless
otherwise provided by statute or determined by the Court. Rules
142(a), 240(a); Saba Pship. v. Commissioner, T.C. Memo. 2003-31.
Respondent has pleaded new matter in his amendments to
answer, filed April 23, 2004; specifically, that SMP’s reported
tax basis in its SMHC stock should be adjusted to zero and that
SMP’s sales of receivables to TroMetro should be treated as sales
of an option to acquire an equity interest in SMHC or its
successor. Under Rule 142(a), respondent bears the burden of
proof with respect to this new matter.82
82 Petitioner contends that respondent’s pretrial memorandum
raises certain issues, generally relating to the bona fides of
the $79 million receivable, that constitute new matter. We
disagree. The issues in question relate to the adjustments
determined in the FPAAs.
Page: Previous 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 NextLast modified: May 25, 2011