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Effective January 1, 1995, decedent and A.C Jones formed
JBLP under Texas law. Decedent contributed the surface estate of
the Jones Borregos Ranch, livestock, and certain personal
property in exchange for a 95.5389-percent limited partnership
interest. The entire contribution was reflected in the capital
account of decedent. A.C. Jones contributed his one-fifth
interest in the Jones El Norte Ranch in exchange for a 1-percent
general partnership interest and a 3.4611-percent limited
partnership interest.
On January 1, 1995, the same day that the partnership was
effectively formed, decedent gave to A.C. Jones an 83.08-percent
interest in JBLP, leaving decedent with a 12.4589-percent limited
partnership interest. Decedent used a document entitled “Gift
Assignment of Limited Partnership Interest” to carry out the
transfer. The document stated that decedent intends that A.C.
Jones receive the gift as a limited partnership interest.
Federal income tax returns for 1995, 1996, 1997, and 1998
were filed for JBLP and signed by A.C. Jones as tax matters
partner. Attached to each return were separate Schedules K-1 for
each general partnership interest and each limited partnership
interest. The Schedules K-1 for the limited partnership interest
of A.C. Jones included the interest in partnership received by
gift from decedent.
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Last modified: May 25, 2011