Alan H. Ginsburg and Estate of Harriet F. Ginsburg, Deceased, Alan H. Ginsburg, Personal Representative - Page 11

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          petitioners include the limitation of partnership losses to the             
          partner’s basis in a partnership interest, the at-risk limitation           
          under section 465, the passive loss limitation rules under                  
          section 469, and the S corporation loss limitation rules under              
          section 1366, which are all “affected item bases” for disallowing           
          losses at the partner level.  Respondent reasons that the                   
          statement in the notice of deficiency “nor has it been                      
          established that any loss attributable to Pascal & Co. is                   
          allowable to you, or not limited” (emphasis added) encompasses              
          the possibility that the loss was not allowable to petitioners              
          for reasons that were peculiar to their individual tax                      
               Despite the technical inaccuracies3 in respondent’s notice             
          of deficiency, the existing jurisprudence regarding the                     
          sufficiency of a notice of deficiency favors respondent.  It is             
          well settled that no particular form is required for a notice of            
          deficiency, and that the Commissioner need not explain how the              

               3On Schedule E of their 1995 Form 1040 petitioners claimed             
          losses of $4,087,725 from NASM and $2,941,054 from FAP.  However,           
          the notice of deficiency adjusted $3,468,019 of loss from each of           
          the S corporations, which is each S corporation’s share of loss             
          from Pascal & Co. reflected on the tax return filed by UK Lotto.            
          If the notice of deficiency was adjusting an affected item, there           
          would have been calculations to redetermine the flow-through                
          amounts from NASM and FAP.  In addition, the notice of deficiency           
          does not discuss petitioners’ bases, nor do the adjustments take            
          into account any of the passive income petitioners reported.                
          None of the adjustments respondent made correspond to any of the            
          losses petitioners deducted on Schedule E of their Form 1040 or             
          the accompanying Statement 15.                                              

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