Glob. Asset Fund 2009 v. Comm'r of Internal Revenue

Full title: Global Asset Fund 2009, LLC, Global Asset Recovery, LLC, Tax Matters…

Court: United States Tax Court

Date published: Mar 4, 2022

No. 25108-17 (U.S.T.C. Mar. 4, 2022)

Opinion

25108-17

03-04-2022

Global Asset Fund 2009, LLC, Global Asset Recovery, LLC, Tax Matters Partner, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent

Cary Douglas Pugh, Judge.

ORDER AND DECISION

Cary Douglas Pugh, Judge.

This case was stricken from the Court's October 7, 2019, New Orleans, Louisiana trial session and continued. Jurisdiction was retained by this Division of the Court. On November 29, 2021, respondent filed a Motion for Entry of Decision, advising that petitioner does not object. No objection was filed within the time frame prescribed by Rule 248(b), Tax Court Rules of Practice and Procedure. Upon due consideration and for cause, it is hereby

ORDERED that respondent's Motion for Entry of Decision, filed November 29, 2021, is granted. It is further

ORDERED AND DECIDED: That the following statement shows the adjustments to the partnership items of Global Asset Fund 2009, LLC, for its taxable year 2009:

Partnership Item As Reported As Determined Bad Debt Deduction $18, 378, 811 $0 Other Deductions $170, 925 $0 Interest Expense $58, 453 $0 Gross Nonfarm Income $108, 189 $0 Portfolio Income (Loss)-Interest $0 $8, 189

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It is further

ORDERED AND DECIDED that Global Asset Fund 2009, LLC, is not a securitization partnership for purposes of I.R.C. § 743(f) with regard to its taxable year 2009. It is further

ORDERED AND DECIDED that the partner contributions of Brazilian credit card receivables to Global Asset Fund 2009, LLC, in taxable year 2009, upon which the Bad Debt Deduction was claimed, were not valid partner contributions. It is further

ORDERED AND DECIDED that the partners of Global Asset Fund 2009, LLC, did not join together for a business purpose in taxable year 2009 and consequently, no partnership was formed or existed in that year. It is further

ORDERED AND DECIDED that Global Asset Fund 2009, LLC, is disregarded under the economic substance, substance over form, and step transaction doctrines with regard to its taxable year 2009. It is further

ORDERED AND DECIDED that the transactions entered into by Global Asset Fund 2009, LLC, are disregarded under the economic substance, substance over form, and step transaction doctrines with regard to its taxable year 2009. It is further

ORDERED AND DECIDED that $8, 189 of Other Income reported by Global Asset Fund 2009, LLC, on its 2009 tax return is reclassified as Portfolio Income (Loss) Interest and treated as investment income included in portfolio income. As set forth above, Global Asset Fund 2009, LLC, is disregarded as a partnership for its taxable year 2009 and, consequently, its Portfolio Income (Loss) Interest of $8, 189 shall be included in the gross income of its partners based upon their proportionate ownership interests in Global Asset Fund 2009, LLC, as directly and separately owned by them. It is further

ORDERED AND DECIDED that the forty percent gross valuation misstatement penalty under I.R.C. § 6662(h) applies to any underpayment of tax resulting from the adjustment to the Bad Debt Deduction, set forth above. It is further

ORDERED AND DECIDED that the twenty percent accuracy-related penalty under I.R.C. § 6662(a) applies to any underpayment of tax resulting from the adjustments to the Other Deductions and Interest Expense, as set forth above. 2