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(1) Petitioner’s motion to dismiss for lack of jurisdiction and
to strike; (2) petitioner’s motion for summary judgment; (3)
respondent’s motion for summary judgment; and (4) petitioner’s
motion for leave to file a second amended petition. For the
reasons stated below, we shall grant petitioner’s motion for
leave to file a second amended petition and deny the remaining
motions. Unless otherwise indicated, all Rule references are to
the Tax Court Rules of Practice and Procedure, and all section
references are to the Internal Revenue Code, as amended.
Background
Curr-Spec Partners, L.P. (the partnership), filed a Form
1065, U.S. Partnership Return of Income, for the taxable year
1999 on or about October 11, 2000. The partnership reported
$6,239,938 of capital contributions, a net loss of $2,343, and
distributions to partners of $6,237,595.
On October 13, 2004, respondent issued Curr-Spec Managers,
L.L.C., Tax Matters Partner (petitioner), a notice of final
partnership administrative adjustment (FPAA) for the taxable year
1999. Respondent determined, among other things: (1) The
partnership was a sham; (2) as a result, all transactions engaged
in by the partnership would be treated as engaged in directly by
the partners; (3) all income, deductions, gains, and losses
reported by the partnership would be disallowed; and (4) the
partners would be treated as having no bases in their respective
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