- 7 -
percent general partnership interest; and (3) a combined 97.07-
percent class B limited partnership interest.
Kerr Interests Limited Partnership
On December 31, 1993, petitioners, their children, and KFLP
executed an agreement forming the Kerr Interests Limited
Partnership (KILP) under TRLPA. Petitioners made all capital
contributions to KILP in the form of stocks, bonds, and real estate
with an aggregate fair market value of approximately $11 million.
The Kerr children did not make any capital contributions to KILP.
At the time KILP was formed, petitioners were the sole general
partners. However, petitioners immediately assigned all of their
general partnership interest in KILP to KFLP and a portion of their
class B limited partnership interest in KILP to KFLP and the Kerr
children. In particular, KFLP received a 2-percent general
partnership interest and an 18-percent class B limited partnership
interest in KILP, while the Kerr children each received a .0785-
percent class B limited partnership interest in KILP. There is no
evidence in the record that petitioners executed a written consent
admitting KFLP as a general partner of KILP.
Following the transfers described above, petitioners retained
a combined 100-percent class A limited partnership interest in
KILP7 and a combined 76.686-percent class B limited partnership
interest.
7 Pursuant to sec. 5.01 of the KILP partnership agreement,
class A limited partners were entitled to an annual guaranteed
payment.
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Last modified: May 25, 2011