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checking account. The partnership paid the management trust
expenses, such as preparation of the trust tax returns.
2. Operation of the Partnership
Petitioner signed all of the checks drawn on the partnership
checking account. The partnership kept no records, prepared no
annual reports, and had no employees. The children and their
trusts did not participate in managing the partnership. The
partners or their representatives have not exchanged any
correspondence, meeting notes, or e-mail about the partnership’s
operations. The partners never met and never discussed
conducting any business activity. All assets and know-how came
from petitioners.
The partnership has never borrowed or lent money, and never
conducted any business activity. It has not bought, otherwise
acquired, or sold any notes or obligations of any entity other
than Government-backed securities. The partnership did not
prepare annual financial statements or reports.
3. Partnership Assets
Petitioner did not trade the partnership’s bond funds. He
reinvested the partnership’s Treasury notes when they matured.
He managed these investments the same way before and after he
transferred them to the trust. The partnership did not rent real
property to third parties.
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Last modified: May 25, 2011