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loss under section 469 is an affected item because treatment of
the loss does not produce a uniform effect on the partners),
supplemented 110 T.C. 440 (1998); Hambrose Leasing 1984-5 Ltd.
Pship. v. Commissioner, 99 T.C. 298, 308-309 (1992) (holding that
the amount a partner has at risk under section 465 is an affected
item); Dial USA, Inc. v. Commissioner, 95 T.C. at 5-6 (a
shareholder’s basis in an S corporation cannot always be
determined by simply looking at S corporation items).
We conclude that the phrase “allowable to you, or not
limited” in respondent’s notice of deficiency suffices to notify
petitioners of the possibility of an affected items adjustment.
The fact that there is a reference to affected items, however
obscure, is sufficient despite the inconsistent adjustments made
in the notice of deficiency.4
The items respondent seeks to adjust are affected items.
Respondent would have to determine these items on the basis of
factors that were unique to petitioners, such as each
petitioner’s basis in the S corporations and the extent to which
each petitioner was at risk with respect to the Pascal & Co.
investment. We have jurisdiction over affected items in this
case, even though no FPAA was issued. See Roberts v.
Commissioner, 94 T.C. at 860 (holding that the Court has
4We do not address the burden of proof in this situation and
whether respondent’s adjustments raise new matters under Rule
142(a).
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