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Upon the formation of Monroe, Clinton, and Rocky Mount,
decedent and Fred Jr. each owned a 45-percent general partnership
interest and a third party, Frank M. McCool (McCool), owned the
remaining 10-percent general partnership interest. McCool was an
engineer and worked as a general manager for a company that Fred
Jr. operated. Decedent and Fred Jr. each owned 50 percent of
Charlotte from inception. McCool predeceased decedent, and in
1985, decedent and Fred Jr. purchased McCool’s three 10-percent
general partnership interests from his widow for a total of
$65,000. Thereafter and until decedent’s death, decedent and
Fred Jr. each owned a 50-percent general partnership interest in
each of the housing partnerships.
The housing partnerships held multifamily rental housing
projects operated and maintained under Housing Assistance
Payments contracts (HAP contracts) with the U.S. Department of
Housing and Urban Development (HUD) pursuant to the United States
Housing Act of 1937, ch. 896, 50 Stat. 888, currently codified at
42 U.S.C. secs. 1437-1437x (1994), and the Department of Housing
and Urban Development Act, Pub. L. 89-174, 79 Stat. 667 (1965),
currently codified at 42 U.S.C. secs. 3531-3547 (1994). The HAP
contracts were executed by HUD in order to provide, through local
public housing agencies, financial assistance to eligible
families of lower income in renting housing. Pursuant to these
HAP contracts, the Government pledged to pay a certain annual
contribution to the applicable public housing agency on behalf of
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Last modified: May 25, 2011