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Issue 2. Whether Certain Commitment Fees Paid to Century
Industries, Ltd., Are Includable in Kanter's Income for 1981,
1982, 1983, 1984, and 1986
FINDINGS OF FACT
Century Industries, a partnership, was organized in 1979.
Its partners were the Bea Ritch trusts, Weisgal individually
(rather than as trustee of the Bea Ritch trusts), and a third
individual. The 25 trusts (collectively), Weisgal, and the other
individual each held one-third interests in the partnership. The
partnership's objective was to engage in highly leveraged
investments in which the partners would contribute relatively
minimal amounts of their own capital. The partnership was
ultimately unsuccessful in such investments.
In early 1980, the partnership was reconstituted. The third
individual referred to above withdrew from the partnership, new
partners were admitted, and the partnership's investment focus
was changed. The new partners included Kanter, four family
trusts for the benefit of Weisgal's family members (the James
Children's Trust, the Lawrence Children's Trust, the Lee
Children's Trust, and the Richard Children's Trust), and another
investment partnership composed of irrevocable trusts for the
benefit of Weisgal's family called Atlay Valley Investments
General Partnership (Atlay partnership).
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