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adjusted, pursuant to the authority contained in
Treas. Reg. § 1.701-2, to achieve results that are
consistent with the intent of subchapter K by
ignoring the existence of the partnership, or
treating transactions purportedly engaged in by
the partnership as engaged in directly by the
purported partners.
6. It is further determined, in the alternative, that
the loss claimed on your 1999 and 2000 federal
income tax returns should be decreased by the
items listed under 1) in the amount of $11,687,810
and $15,495,756 to reflect the limitation on
Arlene Nussdorf Trust’s adjusted basis in it’s
partnership interests resulting from it’s contri-
bution of it’s position(s) in the option transac-
tion(s) to the partnerships, pursuant to Treas.
Reg. § 1.752-06T.
7. It is further determined, in the alternative, that
the loss claimed on your 1999 and 2000 federal
income tax return should be decreased in the
amount of $11,687,810 and $15,495,756 to limit any
loss incurred by you and the partnership in con-
nection with the option transaction to the amount
actually at risk in the transaction, pursuant to
Internal Revenue Code § 465(b)(4).
8. It is further determined, in the alternative, that
the loss claimed on your 1999 and 2000 federal
income tax return should be decreased by the
amount of $11,687,810 and $15,495,756 to reflect
the fact that the amount invested in the option
transaction purportedly generating the losses
claimed represents a single, unitary investment of
$26,700,190 in a single option position rather
than a net investment in the same amount in off-
setting option positions.
9. It is further determined that no deduction is
allowed for any legal, accounting, consulting and
advisory fees claimed since you failed to estab-
lish that such expenditures were incurred, and if
incurred, are deductible under any provision of
the Internal Revenue Code, including but not lim-
ited to Internal Revenue Code §§ 183 and 212.
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Last modified: November 10, 2007