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partners in DRD after 1989 because petitioner intended their
partnership to cease in 1989. We disagree.
A partnership terminates for Federal tax purposes if (1) no
part of any business, financial operation, or venture of the
partnership continues to be carried on by any of its partners in
a partnership; or (2) within a 12-month period there is a sale or
exchange of 50 percent or more of the total interest in
partnership capital and profits. See sec. 708(b)(1). Neither of
these requirements was met during the years in issue. To
withdraw as a partner under Texas law, a partner must notify the
partnership of his or her intent to withdraw, or another event of
withdrawal (e.g., expulsion, death, or bankruptcy) must occur.
See Tex. Rev. Civ. Stat. Ann. art. 6132b, sec. 6.01 (Vernon
1990). Petitioners do not contend that any of these things
occurred during the years in issue. Thus, we conclude that
petitioner was a partner in DRD during the years in issue.4
4 Respondent offered the settlement agreement for
petitioners’ suit against Trisch (see par. I-F, above) into
evidence to show that petitioner and Trisch were partners during
the years in issue. At trial, we ruled that it was not
admissible under Fed. R. Evid. 408 because it was offered to show
the validity of petitioner’s representation in his suit against
Trisch that they were partners during the years in issue.
Respondent’s request that we admit the settlement agreement is
moot because we have concluded that petitioner and Trisch were
partners in the years in issue based on other evidence in the
record.
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