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Participating partner submits corresponding computations and
makes the same argument with respect to Mr. Curtis; i.e., because
the net decrease in Mr. Curtis’s share of Countryside’s and MP’s
liabilities resulting from the liquidating distribution (computed
to be $7,473,190) was less than his adjusted basis for his
interest in Countryside immediately before that distribution
(computed to be $7,760,895), pursuant to section 731(a), no gain
was recognized to Mr. Curtis on the liquidating distribution.12
Participating partner’s position that neither Mr. Winn nor
Mr. Curtis recognized gain on the liquidating distribution is
dependent upon his argument that the AIG notes were not
“marketable securities”, as defined in section 731(c)(2).13 In
support of that argument, participating partner has submitted two
affidavits. The first is the affidavit of Leslie J. Nanberg (Mr.
Nanberg), a registered investment adviser in Massachusetts and a
12 Participating partner’s computations for Mr. Winn and
Mr. Curtis are reproduced as apps. B and C.
13 Because the AIG notes constituted more than 90 percent
of MP’s assets, by value, and CLPP’s indirect interest (through
MP) in those assets constituted more than 90 percent of CLPP’s
assets, by value, on the date of the liquidating distribution,
Countryside’s liquidating distribution to Mr. Winn and Mr. Curtis
of a 99-percent interest in CLPP would be treated as a
distribution of money, for purposes of sec. 731(a), should the
AIG notes be considered marketable securities. See sec.
731(c)(2)(B)(v); sec. 1.731-2(c)(3)(i), Income Tax Regs.
Therefore, the status of the AIG notes as nonmarketable
securities (and, therefore, as property other than money for
purposes of sec. 731(a)) is crucial to participating partner’s
position, whether or not we disregard the separate existence of
CLPP and MP for Federal income tax purposes and treat the
liquidating distribution as a distribution of the AIG notes
themselves, an assumed scenario that participating partner
concedes for purposes of the motion.
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Last modified: March 27, 2008