-2-
capital accounts. Pursuant to the provision, H, a
member of L with a 99-percent interest therein, took
into account its proportionate share of L’s recourse
debt in computing its at-risk amounts under sec.
465(b)(2)(A), I.R.C., for H’s taxable years ended in
July 2000 and 2001.
Held: For Federal income tax purposes, the
provision is inapplicable to H’s taxable year ended in
2000 because the amendment was made too late under sec.
761(c), I.R.C., and other provisions, to be included in
L’s operating agreement for that year.
Held, further, H may not take into account L’s
recourse debt for H’s taxable year ended in 2001
because H was not personally liable for the repayment
of that debt under sec. 465(b)(2)(A), I.R.C.
William F. Russo and R. Daniel Fales, for petitioner.
Gary R. Shuler, Jr., for respondent.
SUPPLEMENTAL MEMORANDUM FINDINGS OF FACT AND OPINION
LARO, Judge: This case is before the Court on remand from
the Court of Appeals for the Sixth Circuit. We filed our initial
report as Hubert Enters., Inc. & Subs. v. Commissioner, 125 T.C.
72 (2005) (Hubert I). Hubert I was a consolidation of three
cases, and the Court of Appeals for the Sixth Circuit affirmed
our decisions in two of those cases. See Hubert Enters., Inc. v.
Commissioner, 230 Fed. Appx. 526 (6th Cir. 2007), affg. in part,
vacating in part and remanding 125 T.C. 72 (2005). The Court of
Appeals for the Sixth Circuit vacated the remaining decision and
remanded the case to this Court to decide, after allowing the
parties to develop the record more fully, whether the deficit
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