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10. The determination of the cost basis of the
Purchased Euro Option in the hands of Petitioner is a
pure nonpartnership item that must be determined in
this individual proceeding. Although that cost basis
(along with the cash contributed) becomes the basis of
* * * [the partner’s] partnership interest [in Ever-
green Trading], the later contribution does not convert
a nonpartnership issue into a partnership item. Just
as if Ms. Nussdorf [petitioner in the case at docket
No. 24289-05] had purchased a partnership interest from
an outsider, the determination of Ms. Nussdorf’s cost
basis in her Purchased Euro Option is irrelevant to any
other partner and cannot be determined by examining the
partnership books. * * *
11. The cost basis of the Purchased Euro Option
in the hands of Ms. Nussdorf must be determined by
looking to I.R.C. § 1012 and the authorities thereunder
* * *.
12. An issue concerning the cost basis of prop-
erty in the hands of the taxpayer, pre-contribution,
inevitably turns on law and facts unique to the tax-
payer and the particular property in question, which
are the hallmark of “nonpartnership items.” * * * To
consider issues “peculiar to a single partner” as
partnership items, even those relating to partnership
gains or losses, would “blur or erase . . .the distinc-
tion between proceedings involving partnership items
and those involving nonpartnership items” and “would be
contrary to the system of separate treatment of part-
nership and nonpartnership issues Congress established
by enacting TEFRA.” [Reproduced literally, citations
omitted.]
Respondent counters:12
11(...continued)
as petitioners’ respective motions in the cases at docket Nos.
24297-05 and 24301-05.
12For convenience, we quote from respondent’s response to
petitioner’s motion in the case at docket No. 24289-05. That
response is virtually the same as respondent’s respective re-
sponses to petitioners’ respective motions in the cases at docket
Nos. 24297-05 and 24301-05.
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