Holden C. Gutermuth - Page 3

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          On June 1, 1989, petitioner and Mr. Troue filed a New York State            
          certificate of partnership with the County Clerk of Rensselaer              
          County, New York, the county in which NTG’s office was located.             
               During 1989, petitioner and Mr. Troue generally held                   
          themselves out to the public as doing business as partners under            
          the name of NTG.  Petitioner and Mr. Troue used stationery                  
          bearing the name of NTG and placed advertisements for their legal           
          services under the name of NTG.  Petitioner and Mr. Troue                   
          maintained a joint bank account under the name of NTG.  During              
          1989, one set of books and records was maintained with respect to           
          the income and expenses of NTG.  Although no formal written                 
          partnership agreement was entered into by petitioner and                    
          Mr. Troue regarding NTG, petitioner and Mr. Troue understood that           
          income and expenses with respect to their practice were to be               
          shared.                                                                     
               During the summer of 1989, petitioner made contributions               
          totaling $16,300 to the capital of NTG.                                     
               On June 9, 1989, petitioner and Mr. Troue obtained a loan of           
          $15,000 from Marine Midland Bank, N.A., to fund the working                 
          capital and payroll of NTG.  NTG’s books and records reflected              
          that the $15,000 bank loan was made directly to NTG.  During                
          1989, payments totaling $5,004 were made on this loan from funds            
          in the bank account of NTG.                                                 
               On August 3, 1989, the former partners of NTGO, as part of             
          the process of winding up NTGO’s business affairs, transferred              




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