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(referred to collectively herein as the contributed property) to
SFLP for a 99-percent limited partnership interest in SFLP. All
of the contributed property was reflected in decedent’s capital
account. The fair market value of the contributed property was
$9,876,929. Approximately 75 percent of that value was
attributable to cash and securities.
Mr. Gulig invited decedent’s children to participate in SFLP
through an interest in Stranco, the corporate general partner of
SFLP. Decedent purchased 47 percent of Stranco for $49,350, and
Mrs. Gulig purchased the remaining 53 percent of Stranco for
$55,650 on behalf of Jeanne Strangi, John Strangi, Albert T.
Strangi, and herself. To purchase the Stranco shares, Jeanne
Strangi, John Strangi, and Albert T. Strangi each executed
unsecured notes dated August 12, 1994, to Mrs. Gulig, with a face
amount of $13,912.50 and interest at 8 percent. Stranco
contributed $100,333 to SFLP in exchange for a 1-percent general
partnership interest. Subsequently, as a result of the downward
adjustment of the value of decedent’s contributed property,
Stranco’s capital contribution was reduced on its books by $1,000
to $99,333, and a receivable was recorded indicating $1,000 due
from SFLP.
Decedent and the Strangi children made up the initial board
of directors of Stranco, and Mrs. Gulig served as president. On
August 17, 1994, the Strangi children and Mr. Gulig met to
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