Hubert Enterprises, Incorporated, Successor By Merger To Hubert Holding Company - Page 1

          T.C. Memo. 2008-46                                                          

                               UNITED STATES TAX COURT                                

          HUBERT HOLDING COMPANY, Petitioner v. COMMISSIONER                          
          OF INTERNAL REVENUE, Respondent*                                            

               Docket No. 16798-03.              Filed February 28, 2008.             

                    L is a limited liability company that purchased                   
               equipment and partially financed its purchases using                   
               recourse debt.  L reports its operations for Federal                   
               income tax purposes on the basis of a taxable year                     
               ending July 31.  On Mar. 28, 2001, L’s two members                     
               amended L’s operating agreement to add a provision on                  
               deficit capital account restoration.  Under the                        
               provision, stated as effective Jan. 1, 2000, any L                     
               member with a deficit capital account following the                    
               liquidation of its interest in L had to contribute to L                
               by the end of the taxable year, or if later within 90                  
               days after the date of the liquidation, funds equal to                 
               the amount of the deficit for payment to L’s creditors                 
               or for distribution to the members of L with positive                  

               * This opinion supplements Hubert Enters., Inc. & Subs. v.             
          Commissioner, 125 T.C. 72 (2005), affd. in part, vacated in part            
          and remanded 230 Fed. Appx. 526 (6th Cir. 2007).                            

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Last modified: March 27, 2008