Southgate Master Fund, L.L.C. Ex Rel. Montgomery Capital Advisors, LLC v. United States

PATRICK E. HIGGINBOTHAM, Circuit Judge:

We affirm in all respects the district court’s judgment disposing of this petition for a readjustment of partnership tax items under 26 U.S.C. § 6226. The plaintiff, Southgate Master Fund, L.L.C., was formed for the purpose of facilitating the acquisition of a portfolio of Chinese nonperforming loans (“NPLs”). A partnership for tax purposes, Southgate’s disposition of its portfolio of NPLs generated more than $1 billion in paper losses, about $200 million of which were claimed as a deduction by one of its partners in tax year 2002. The Internal Revenue…