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In 1982, Kanter also transferred his 8-percent limited
partnership interest in One River Partnership to FPC Subventure
Partnership in exchange for a $2,000 promissory note.
During the years at issue, Kanter (who held an interest in
FPC Subventure through grantor trusts) and Lisle reported
distributive shares of FPC Subventure’s partnership items of
income, loss, deduction, and credit on their individual tax
returns. However, Four Ponds Partnership and One River
Partnership (1) reported net losses in 1981 to 1984 and 1987 to
1989 totaling $1,067,131, and (2) made cash distributions to its
partners in 1981 to 1984 and 1987 to 1989 totaling $731,080.
Approximately 7 percent of Four Ponds’ and One Rivers’
partnership losses, described above, flowed through to Lisle
through FPC Subventure Partnership.
In addition to these favorable tax effects, during the
period 1981 to 1989 Lisle received at least $682,520 in cash
distributions from FPC Subventure Partnership.116 Consequently,
FPC Subventure Partnership served for Lisle the dual purposes of
(1) a tax shelter, and (2) a source of substantial cash
distributions. Kanter structured FPC Subventure Partnership as a
116 FPC Subventure Partnership’s tax returns for 1985 and
1986 apparently were not made part of the record.
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