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doing business as the general partnership, “all of the property
conveyed to * * * [the QTIP trustee] by an Executor’s General
Bill of Sale of even date conveying all of the property owned and
operated by” Mr. Forbes, doing business as the sole
proprietorship. The assets so conveyed are described in language
identical to that contained in the general bill of sale from the
executor to the QTIP trustee, specifically including “All growing
crops and timber on land owned by” the limited partnership. On
its books, the general partnership recorded receipt of all the
timber and growing crops on the Forbes land. The pecan trees as
well as the pecan nuts were treated as growing crops.
In consideration of all the sole proprietorship assets, the
general partnership agreed to pay the QTIP trustee $550,742, less
a $100,000 offsetting credit for net liabilities that the Forbes
estate owed the general partnership. Accordingly, the general
partnership gave the QTIP trustee a promissory note for $450,742.
The purchase price was the result of arm’s-length bargaining and
was based on values reflected on the Forbes estate tax return
(which in turn were based on a 1985 independent appraisal), with
certain adjustments, including the addition of certain amounts
received or receivable under the timber contract with Tolleson
Lumber.4
4 Although the record is sketchy in this regard, the
evidence does not indicate, and respondent has not suggested,
(continued...)
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Last modified: May 25, 2011