-262-
partnership tax returns,183 we do not decide respondent’s at-risk
and passive activity loss arguments.
X. SMP’s Basis in SMHC Stock
On its Forms 1065, U.S. Partnership Return of Income, for
1997 and 1998, SMP reported that it had an adjusted basis of $665
million in its SMHC stock.184 In an amendment to his answer,
respondent proposes adjusting SMP’s reported tax basis in its
SMHC stock for these years to zero.
Petitioner agrees that this item is a partnership item but
challenges its relevance to the issues in this case. Petitioner
points to the fact that “SMP did not dispose of any stock during
the years before the Court or claim a loss from the sale of SMHC
stock.” Respondent’s position, however, appears more pointed--
respondent challenges SMP’s reporting of its SMHC stock basis
rather than its impact on the loss adjustments in the FPAA.
Section 6226(f) provides with respect to the scope of our
judicial review that we shall have jurisdiction--
to determine all partnership items of the partnership
for the partnership taxable year to which the notice of
final partnership administrative adjustment relates,
the proper allocation of such items among the partners,
and the applicability of any penalty, addition to tax,
or additional amount which relates to an adjustment to
a partnership item.
183 See supra note 6.
184 SMP’s adjusted basis in its SMHC stock is reported on
statements accompanying Schedules L, Balance Sheets per Books, of
its partnership returns.
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