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1. As Described in the Business’s Financial Statements
and Income Tax Returns
a. 1986
No direct references were made and no explanations were
provided in PKVI LP’s audited financial statements for the year
ended December 31, 1986, as to the amounts that PKVI LP received
from PK Ventures during that year.
On PK Ventures’ Schedule K-1, Partner’s Share of Income,
Credits, Deductions, etc., attached to PKVI LP’s Form 1065 for
1986, PK Ventures was reported to have made a $500 capital
contribution to PKVI LP during that year and to have a capital
account with a balance of $242 as of the end of that year. No
other direct references were made and no other explanations were
provided in PKVI LP’s Form 1065 for 1986 as to the amounts that
PKVI LP received from PK Ventures during that year. There were
also no amounts separately identified as interest payments made
and/or imputed by PKVI LP to PK Ventures on its Form 1065 for
1986.
On the Statement of Financial Condition included in
PK Ventures’ audited financial statements for the year ended
December 31, 1986, a $242 “Investment in affiliated partnership”
was listed as an asset. This entry referred to PK Ventures’
investment in PKVI LP. The $242 was listed under “Other
investments” on the Schedule L attached to PK Ventures’ income
tax return for 1986. No other direct references were made and no
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