Salina Partnership L.P. v. Commissioner
United States Tax Court
In 1991, FPL incurred a substantial capital loss on the sale of a subsidiary. In December 1992, GS, an investment bank, persuaded FPL to invest in a domestic limited partnership, S, newly formed at GS's request by two affiliates of ABN, an international bank based in The Netherlands. S, at GS's suggestion, took a substantial short position in U.S. Treasury bills.
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In 1991, FPL incurred a substantial capital loss on the sale of a subsidiary. In December 1992, GS, an investment bank, persuaded FPL to invest in a domestic limited partnership, S, newly formed at GS's request by two affiliates of ABN, an international bank based in The Netherlands. S, at GS's suggestion, took a substantial short position in U.S. Treasury bills. FPL purchased a 98-percent limited partnership interest in S to take advantage of desired tax benefits and to enhance its return on its short-term, fixed-income investments. Immediately following FPL's investment, S closed its short…
1Opinion of the Court
SALINA PARTNERSHIP LP, FPL GROUP, INC., A PARTNER OTHER THAN THE TAX MATTERS PARTNER, Petitioner v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Salina Partnership L.P. v. Commissioner
No. 25084-96
United States Tax Court
T.C. Memo 2000-352; 2000 Tax Ct. Memo LEXIS 421; 80 T.C.M. (CCH) 686; T.C.M. (RIA) 54122;
November 14, 2000, Filed
Decision will be entered under Rule 155.
In 1991, FPL incurred a substantial capital loss on the
sale of a subsidiary. In December 1992, GS, an investment bank,
persuaded FPL to invest in a domestic limited partnership, S,
newly formed at GS's request by two affiliates of…
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