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Petitioner managed the ranch and the houses before December
28, 1994. Petitioner paid the real estate taxes and insurance on
those properties before December 28, 1994.
B. The Partnership
1. Initial Discussions
Robert Gilliam (Gilliam), a certified public accountant, met
petitioner in the 1970's while Gilliam was auditing Luby’s
Cafeterias. Petitioners became Gilliam’s tax clients in 1992 or
1993. Gilliam and petitioner discussed estate planning in 1993
and 1994.
Gilliam knew that petitioners had about $10 million in
assets. Gilliam and petitioner discussed the fact that, if
petitioners did no estate planning, Federal transfer taxes would
equal 50 to 55 percent of their estate. Gilliam and petitioner
discussed the tax benefits of estate planning. Gilliam told
petitioners that they could claim discounts for transferred
limited partnership interests if supported by a professional
appraisal. Gilliam believed that petitioners could form a trust
to help protect their assets from creditors and that a limited
partnership would add another layer of protection for those
assets.
Petitioner sought estate planning advice from John Banks,
Jr. (Banks), in 1993 or 1994. Banks had been petitioners’
attorney since 1981. Petitioners met with Gilliam or Banks
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Last modified: May 25, 2011