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petitioners. Respondent contends that the Court had no
jurisdiction to determine basis in excess of the amounts
determined in the statutory notice, which did not depend on
recharacterization or any other determination that would cause
the Roses’ basis in Zephyr to become a partnership item.
Respondent notes that the Roses did not report any COD income
from Zephyr for 1989 or 1990 and disputes petitioners’ contention
with respect to the effect of the Schedule L to the 1990 return.
Respondent also contends that the Court lacks jurisdiction to
increase the Roses’ basis in Zephyr in accordance with
respondent’s concession.
In view of the extended history of these cases, we believe
that the interests of justice are best served, and jurisdiction
is not implicated, by accepting the Roses’ concession in their
petition of the correctness of respondent’s determination of
basis, as supplemented by respondent’s concession of increased
basis. We do not believe that we are required to increase basis
in accordance with Zephyr’s 1990 return consistent with a claim
made for the first time in a motion for reconsideration and based
on an analysis different from and inconsistent with the claim
made prior to and during trial and in posttrial briefs
specifically addressed to that issue. The notice of deficiency
that was sent to the Roses does not purport to redetermine COD
income or any other entity-level item, so cases holding notices
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