We use the $6,510,555 amount for purposes of this opinion.īowlen I treated the sale of the partnership interest to Bowlen as causing a section 708(b)(1)(B) termination of the partnership for Federal tax purposes. Respondent relied on the amount shown in the exhibit on brief without objection by petitioner. The parties stipulated that the partnership had an adjusted basis in the player contracts on May 31, 1984, in the amount of $6,328,656 however, an exhibit reflects an adjusted basis of $6,510,555. Bowlen I's adjusted basis in the player contracts on May 31, 1984, before the sale of the partnership interests to Bowlen II, was $6,510,555.
#P d b sports ltd professional#
At the time of Bowlen's purchase, Bowlen I owned the following assets: the NFL franchise for the Broncos, professional football player contracts, a stadium lease, and television rights. +-+ ¦ Partner ¦ Percentage Ownership ¦ Type of Interest ¦ +-+-+-¦ ¦ ¦ ¦ ¦ +-+-+-¦ ¦Bowlen II ¦60.8 ¦General partner ¦ +-+-+-¦ ¦Adams ¦39.2 ¦Limited partner ¦ +-+ Bowlen II's and Adams' aggregate basis in their partnership interests in Bowlen I was approximately $72,242,770. On June 1, 1984, Bowlen I was owned as follows: Subsequently, Bowlen transferred his aggregated partnership interest (about 61 percent) in Bowlen I to his corporation, Texas Northern Productions, Inc., also known as Bowlen Sports, Inc., (Bowlen II). 25–percent partnership interest held by Kaiser I for $106,900. At the same time, Bowlen also purchased the.
#P d b sports ltd plus#
Bowlen purchased about 59 percent of Kaiser's partnership interest for $25,793,100 plus assumption of $34,689,717 in Kaiser's partnership liabilities. Bowlen's purchase of Kaiser's Bowlen I partnership interest occurred on June 1, 1984. Second, during March 1984, Kaiser entered into an agreement with Bowlen for the sale of about 61 percent of the Bowlen I partnership. Adams, through Adams' Colorado limited partnership, J.R.A. First, during March 1984, Kaiser sold about 39 percent of the Bowlen I partnership to John R. In 1984, Kaiser disposed of his entire interest in Bowlen I, including his interest held through Kaiser I (the corporate entity), in two separate transactions. (referred to as Bowlen I for purposes of this opinion).
When Bowlen acquired a partnership interest, he changed the partnership name from E.F.K. Due to Bowlen's prior interest in purchasing the Broncos, in late 1983, Kaiser approached Bowlen about acquiring an interest in the partnership.īowlen I, prior to the transactions in question and when controlled by Kaiser, had been named E.F.K.
25 percent of Bowlen I was also indirectly owned by Kaiser, through a corporation E.F.K. Prior to Bowlen's involvement in the Broncos, Bowlen I was 99.75–percent owned by Edgar F. (Bowlen I), was a Colorado limited partnership with its principal place of business in Colorado at the time the petition was filed. During 1984–85, Bowlen acquired an interest as a general partner in a partnership that was the franchised owner and operator of the Denver Broncos (Broncos) professional football team, a member of the National Football League (NFL). Thereafter, he began a real estate development business which he operated into the late 1980's. Patrick Bowlen (Bowlen), after graduating from the University of Oklahoma law school, practiced law for 2 years in Calgary, Canada. The parties' stipulation of facts and the attached exhibits are incorporated herein by this reference.
#P d b sports ltd code#
In particular, the controversy centers on whether section 1056 was intended to apply where the buyer acquires a partnership interest in a partnership holding player contracts.Īll section and subchapter references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure, unless otherwise indicated. Conversely, respondent contends that section 1056 applies to limit amortization to an amount equal to the seller's basis, plus any gain recognized by the seller. Petitioner contends that the partnership provisions apply exclusively and would, in this case, permit the amortization of the fair market value of the player contracts.
After concessions, the sole issue remaining for our consideration is whether the partnership, for purposes of determining the amortizable basis in player contracts, is subject to section 1056 in addition to, in conjunction with, or instead of the subchapter K partnership provisions. Among other adjustments, respondent disallowed amortization in the amounts of $1,878,056 and $259, respectively, claimed with respect to professional football player contracts. Respondent issued notices of final partnership administrative adjustments to P.D.B.
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