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the analyzed period, Eighty-Eight Oil increasingly became more
liquid than the industry.
During the period 1988 through 1994, overall partners’
capital contributions exceeded withdrawals by approximately $60
million. However, in the most recent of those years (1993 and
1994) total withdrawals exceeded contributions by over $36
million. Under the partnership agreement, additional capital
contributions were to be made in the same percentages as the
profit and loss sharing ratios. However, the partners’ capital
account balances were often not in proportion to their profit and
loss sharing ratios. For example, Dave True’s capital account
balance at the end of 1992 was $7,046,509, while total partners’
capital was $43,590,998. This gave Dave True a 16.17-percent
interest in total partners’ capital, as compared with his yearend
profit and loss sharing ratio of 68.47 percent, according to the
partnership agreement dated August 11, 1984, and the 1992
schedule K-1. Petitioners explained that disproportionate
capital accounts were unique to Eighty-Eight Oil, which operated
as a bank that held excess cash for the True family, and did not
reflect the operations of the other True family partnerships.
The day before selling part of his interest in Eighty-Eight
Oil to his sons as of January 1, 1993, Dave True contributed over
$6 million to partners’ capital. In accordance with the
partnership agreement, he then sold 24.84 percent of his Eighty-
Eight Oil partnership interest to his sons based on the book
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