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entities claimed on their respective 1997 partnership tax returns
and that SMP claimed on its 1998 partnership tax return.
Petitioner disagrees. Petitioner contends, among other
things, that substance over form principles do not apply because,
when the contribution of SMHC stock and debt occurred (and
thereafter), the Ackerman group had the legitimate business
purpose of getting into the film business with the Credit
Lyonnais group.
Ultimately, we must decide: (1) Whether SMP is entitled to
a $147,486,000 capital loss on its sale to TroMetro of a $150
million receivable in 1997; (2) whether SMP is entitled to
capital losses of $11,647,367 and $62,237,061 on its sales to
Imperial of portions of its Corona membership interest in 1997;
(3) whether SMP is entitled to a $80,190,418 capital loss on its
sale to TroMetro of an $81 million receivable in 1998; (4)
whether Corona is entitled to a capital loss on its sale to
TroMetro of a $79 million receivable in 1997;8 (5) whether
accuracy-related penalties under section 6662(a) or (h) apply
with respect to the partnership adjustments to SMP’s 1997 and
1998 returns and Corona’s 1997 return.9
8 Corona claimed a $78,768,955 capital loss from the sale of
the $79 million receivable in 1997. We do not have jurisdiction
over the portion of this loss that passed through to Imperial;
i.e., $74,671,378. See supra note 5.
9 On SMP’s FPAA for 1998, respondent also determined a
(continued...)
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