-8-
on March 28, 2001. Although the amendment was written
retroactively as effective January 1, 2000, the agreement had no
such retroactive effect for Federal income tax purposes. LCL’s
partnership return for its taxable year ended July 31, 2000, was
required (absent an extension) to be filed by November 15, 2000,
see sec. 1.6031(a)-1(e)(2), Income Tax Regs., and for Federal
income tax purposes a partnership agreement may include as to a
taxable year only those provisions included with the agreement on
or before the unextended due date of the partnership return for
that year, see sec. 761(c); Fahey v. Commissioner, T.C. Memo.
1979-20; see also Long v. Commissioner, 77 T.C. 1045, 1078 n.17
(1981). In addition, in the context of section 465, section
465(a)(1) requires that the amount for which a taxpayer is at
risk with respect to an activity for a taxable year be determined
as of the close of that year. See also Callahan v. Commissioner,
98 T.C. 276, 281 (1992); Melvin v. Commissioner, 88 T.C. 63, 73
(1987), affd. 894 F.2d 1072 (9th Cir. 1990). The amendment’s
purported retroactive effect to the earlier year also does not
comport with the annual accounting system of Federal income
taxation. Under that system, the amount of income tax payable
for a taxable year is generally determined on the basis of those
events happening or circumstances present during that year. See
Hillsboro Natl. Bank v. Commissioner, 460 U.S. 370, 377 (1983);
Burnet v. Sanford & Brooks Co., 282 U.S. 359 (1931); Hayutin v.
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