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fide, at arm's length, and free from any donative intent"
standard set forth in section 25.2512-8, Gift Tax Regs.
Petitioner asserts that decedent contributed her investment
income to the claimed farm partnership in exchange for her 50-
percent partnership interest. If this were true, decedent’s
transfers would not meet the standard set forth in the
regulation, for the following reason. Decedent became entitled
to $913,200 of investment income during 1979-93, net of
distributions and expenses. Petitioner claims this entire
$913,200 was contributed to the family farm partnership, for use
in the operations of the family farm. However, on the basis of
the Federal fiduciary income tax returns filed by Garry's estate,
we have found that the aggregate net cash needs of the family
farm for 1979-93 did not exceed $239,184; decedent's 50-percent
"partnership share" of this loss would not exceed $119,592.
Therefore, if the farm partnership existed as claimed by
petitioner, decedent would have contributed at least $793,000
(i.e., $913,200 less $119,592) in investment income to the
partnership, in excess of her share of the cash needs (or losses)
of the partnership. There is no evidence that this excess is
accounted for by any assets acquired by the claimed partnership,
or by any value of decedent’s claimed partnership interest
itself. As we have found, the family farm stopped purchasing
farm equipment during the early 1980's, and the farm's personal
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