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acres, “together with all hereditaments and appurtenances thereto
appertaining”. In consideration, Walter and Betty each received
$1 and 389,855 limited partnership units.
The last-mentioned 3,296 acres, together with the 2,058
acres contributed by Mr. Forbes individually, make up the 5,354
acres that were conveyed to the limited partnership (sometimes
referred to herein as the subject property).
Ongoing Conduct of Mr. Forbes’ Sole Proprietorship
After the formation of the limited partnership, Mr. Forbes
continued to conduct his commercial farming business, including
the growing of timber and pecans, as a sole proprietor on the
Forbes land. The limited partnership did not conduct any
business growing timber, pecans, or other crops. After
transferring the Forbes land to the limited partnership, Mr.
Forbes continued to receive all income from timber, pecans, and
other assets located on the Forbes land. During his lifetime,
Mr. Forbes reported all such income and deducted all related
expenses, including depreciation, on his individual Federal
income tax returns.
Similarly, after transferring their land to the limited
partnership, Walter and Betty each continued to receive and
report all income from timber, pecan orchards, and other assets
located on the land they had contributed.
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Last modified: May 25, 2011