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OPINION
A. The Parties’ Arguments
The parties disagree whether their off-the-record
conference, during which they narrowed the issues then being
heard by the Court, included petitioners’ 1986 interest expense
deduction of $368,227. Petitioners contend their agreement
included the 1986 interest expense deduction, and reference to
its inclusion was inadvertently omitted in their representation
to the Court. Respondent disagrees and contends that all of the
reasons stated in the notice of deficiency for disallowance of
the interest expense deduction for 1986 remain in dispute.
B. Analysis
After the parties’ off-the-record conference described
above, counsel for petitioners stated on the record that he
believed the parties’ agreement included all adjustments then
being considered by the Court and invited counsel for
respondent’s position on that assertion. Counsel for respondent
did not point out any qualifications, restrictions, or exceptions
to any of the adjustments as to which the issues had been
narrowed. On brief, respondent takes the position the issues
were not narrowed with respect to petitioners’ 1986 interest
expense deduction, nor was any agreement reached with respect to
that issue.
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