Alan H. Ginsburg and Estate of Harriet F. Ginsburg, Deceased, Alan H. Ginsburg, Personal Representative - Page 13

                                       - 13 -                                         
          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               

Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011