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liabilities, and the capital contributions of each partner,
and by directing that after payment of the partnership's
liabilities, "all other assets of the partnership shall be
delivered to the Estate of James R. Tobias to repay on a
dollar-for-dollar basis to the extent of such assets the
contributions to capital made by James R. Tobias."
We do not interpret the State court opinions as
determining that "James and Darwin each own a 50-percent
interest in the partnership" during the years in issue.
Rather, the State court opinions determined the appropriate
distributions to the partners upon the dissolution and
liquidation of the partnership, on the basis of State law,
the relative capital contributions of the partners, and
principles of equity.
It appears that the estate seizes on the statements in
the State court opinions that "the profits will be shared
equally" and asks this Court to find that each of the
partners held a 50-percent interest in the partnership for
purposes of section 704(b)(1). In effect, the estate asks
us to make that finding without considering the relative
capital contributions of the partners or the other factors
listed in section 1.704-1(b)(3)(ii), Income Tax Regs.
Although the estate does not discuss the four factors
listed in section 1.704-1(b)(3)(ii), Income Tax Regs., the
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