- 5 -
including petitioner's partnership interest in Life Care. The
settlement agreement includes a paragraph that states:
In exchange for a cash payment of Two Hundred
Thousand Dollars ($200,000.00) at the time the Mutual
Release and Settlement Agreement is executed, all
existing lawsuits would be dismissed with prejudice and
complete releases would be exchanged with McMichael.
Petitioner was paid $200,000 upon the execution of the settlement
agreement.
Petitioner did not exercise his option to purchase Smith's
and Fowler's partnership interests in Life Care. By letter dated
November 16, 1989, Mr. Reissman advised Mr. Rosenkranz that Smith
and Fowler would purchase petitioner's interests in the various
Bentley Village entities pursuant to the agreement dated January
12, 1989, and that it was his clients' position that the sale
would be effective January 12, 1989. On June 30, 1990,
petitioner, Smith, Fowler, and other interested parties executed
an agreement (the sale agreement) providing for the transfer of
petitioner's interests in the Bentley Village entities, including
Life Care, to Smith, Fowler, and others, for $2,570,000. The
agreement states that $200,000 of the purchase price was paid
upon execution of the settlement agreement.
Life Care issued petitioner Forms K-1 for each of the
taxable years 1989 and 1990. However, petitioners decided to
exclude petitioner's distributive share of the partnership's
items of income, loss, deduction, and credit in their joint
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 Next
Last modified: May 25, 2011