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"minimal", a partner is subject to tax on his share of
partnership income whether or not such income is actually
distributed to him. See United States v. Basye, 410 U.S.
441, 453-454 (1973); sec. 1.702-1(a), Income Tax Regs.
We also reject the estate's argument that respondent
erred by allocating partnership income for 1990 through
1993 on the basis of the 1997 State court opinion. In
these cases, it is necessary to determine the interest of
each brother in the partnership for purposes of section
704(b)(1), and the determination must be made by taking
into account all of the facts and circumstances relating to
the economic arrangement of the partners. See sec. 1.704-
1(b)(3)(i), Income Tax Regs. We believe that respondent
has correctly reviewed the effect of the 1997 State court
opinion and the other facts and circumstances relating to
the financial arrangements of the brothers in determining
their interests in the partnership.
On the basis of the four factors listed in section
1.704-1(b)(3)(ii), Income Tax Regs., and all the facts and
circumstances of these cases, we find that during each of
the years in issue James had a 100-percent interest in the
partnership income and Darwin had a zero interest in the
partnership income. Accordingly, we agree with respondent
and Darwin that 100 percent of the income of the
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