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named decedent as the limited partner. In addition, decedent was
named the managing partner of each partnership. The partnership
agreements provided that decedent, in her capacity as managing
partner, had "full power to manage and conduct the Partnership's
business operation in its usual course." From the time the
partnerships were formed until shortly before decedent's death,
she managed the partnership assets.
The partnership agreements included provisions relating to:
(1) Capital contributions; (2) allocation of profits and losses;
(3) partnership records; (4) management responsibilities and
powers; (5) admission of new partners; (6) partnership
dissolution and liquidation; and (7) agency relationships among
partners. The partnership agreements provided that decedent
would contribute $1 for her 1-percent interest as a general
partner and $95 for her 95-percent interest as a limited partner.
Each of decedent's children was required to contribute $4 for a
4-percent general partner interest.
On December 31, 1990, and on November 5, 1991, decedent
transferred some of her business assets, in undivided one-third
shares, to the partnerships. The assets included real estate,
partnership interests, and notes receivable. The assets
transferred and their values (as of the date of decedent's death)
were as follows:
Assets Transferred 12/31/90 Value
1. Ho Ho Gourmet Restaurant building $176,000
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