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On January 18, 2000, the remaining balance of the second
option was unwound resulting in $79,208,185 received by Evergreen
Trading with respect to which Evergreen Trading reported in its
2000 partnership tax return a gain of $38,378,419. A portion of
such gain totaling $11,247,796 was allocated to petitioners’
respective flowthrough entities.
During the latter part of March 2000, petitioners’ respec-
tive flowthrough entities withdrew from Evergreen Trading and
paid a 5-percent withdrawal fee of $159,302. When such entities
withdrew from Evergreen Trading, each received a liquidating
distribution of 192,602 Euros with a fair market value of
$185,438. No other cash or property was distributed to petition-
ers’ respective flowthrough entities (or to petitioners in these
cases).
On December 17, 2002, respondent issued a notice of begin-
ning of administrative proceeding with respect to Evergreen
Trading for the taxable year 1999, and on March 19, 2003, respon-
dent issued such a notice with respect to Evergreen Trading for
the taxable year 2000. On September 26, 2005, respondent issued
a notice of final partnership administrative adjustment (FPAA)
with respect to Evergreen Trading for the taxable years 1999 and
2000.
In the FPAA that respondent issued with respect to Evergreen
Trading for the taxable years 1999 and 2000, respondent made the
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Last modified: November 10, 2007