Alan H. Ginsburg and Estate of Harriet F. Ginsburg, Deceased, Alan H. Ginsburg, Personal Representative - Page 10

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          persons hold an interest in the partnership with respect to which           
          proceedings under this subchapter are conducted.”  Since the S              
          corporations are not TEFRA entities, there is no issue of whether           
          the adjustments should have taken place at the S corporation                
               C.   Partner Level                                                     
               Petitioners hold their interest in UK Lotto as “indirect               
          partners” under section 6231(a)(10).  Section 6231(a)(10)                   
          provides that an “‘indirect partner’ means a person holding an              
          interest in a partnership through 1 or more pass-thru partners.”            
          Petitioners argue that the adjustments made in the notice of                
          deficiency are inconsistent with respondent’s position that the             
          disallowed losses are affected items.                                       
               Petitioners argue that the notice of deficiency describes              
          only partnership items, and that the explanation of adjustment              
          calculates the disallowance of the loss to petitioners as if the            
          basis for disallowing it was a partnership level adjustment.                
          Petitioners therefore conclude that we are without jurisdiction             
          over the items in dispute because all partnership items must be             
          determined at the partnership level and not the partner level.              
          See sec. 6221.                                                              
               Respondent contends that the notice of deficiency                      
          originally refers to affected items, not partnership items.                 
          Respondent argues that the reasons for disallowing the losses to            

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