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transfers. Each document stated that decedent intended for his
daughters to receive the gifts as limited partnership interests.
Federal income tax returns for 1995, 1996, 1997, and 1998
were filed for AVLP and signed by Elizabeth 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 each daughter’s limited
partnership interest included the partnership interest received
by gift from decedent.
Decedent’s attorney drafted the partnership agreements of
both JBLP and AVLP with the intention of creating substantial
discounts for the partnership interests that were transferred by
gift. Both partnership agreements set forth conditions for when
an interest that is transferred by gift or by other methods may
convert to a limited partnership interest. Section 8.3 of the
JBLP agreement provides that the general partner and 100 percent
of the limited partners must approve the conversion to a limited
partnership interest in writing, and section 8.3 of the AVLP
agreement provides that the general partners and 75 percent of
the remaining limited partners must approve the conversion in
writing. Both agreements also require that an assignee execute a
writing that gives assurances to the other partners that the
assignee has acquired such interest without the intention to
distribute such interest, and the assignee must execute a
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Last modified: May 25, 2011