- 3 - Petitioners began investing in TBS 90-1 in 1991. That partnership was subject to the unified audit and litigation procedures of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248, sec. 402(a), 96 Stat. 648. Petitioners filed their 1992 Federal income tax return on April 15, 1993, and claimed thereon a deduction for a $112,996 ordinary loss passing to them from TBS 90-1. In Durham Farms #1, J.V. v. Commissioner, T.C. Memo. 2000-159, affd. 59 Fed. Appx. 952 (9th Cir. 2003), the Court held that TBS 90-1 was not entitled to deduct the loss claimed by petitioners because TBS 90-1 did not receive the benefits and burdens of ownership of the underlying asset (i.e., cattle). The decision in Durham Farms ordered and decided the following as to TBS 90-1: Partnership Item As Reported As Determined Depreciation expense $2,174,204 -0- Interest expense 137,750 -0- Accounting fees 3,086 -0- Net Gain--Form 4797 5,435,510 -0- Net self-employment income (2,315,040) -0- Other farm deductions -0- -0- Guaranteed payments -0- -0- The $2,315,040 of deductions underlying the adjustment to net self-employment income consisted of depreciation expense equal to 93.916476605 percent of the total disallowed deductions, interest expense equal to 5.950221162 percent of the total disallowedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 NextLast modified: November 10, 2007