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allocation of items until after Melvin died.19 The testimony at
trial indicated that all witnesses believed that Melvin and
Russell had a close relationship and shared equally in
partnership items. In fact, the estate’s original and amended
Forms 1041 for 1994 and 1995 reflect the estate’s belief that it
acquired a 50-percent interest in BBP as a result of Melvin’s
death.20 No evidence was presented suggesting that either
brother had a problem with the partnership arrangement or the way
partnership items were reported. Each brother appeared to have
been content with the equal reporting arrangement and held
himself out as owning an equal interest in the partnership. The
tax returns for the years 1980 through 1994 indicate that in some
years the income from the oil and gas activity was more than the
income from the farming activity and vice versa.
All partners’ interests in a partnership are considered
equal. Sec. 1.704-1(b)(3)(i), Income Tax Regs. It is undisputed
19Consistent with allocations reported on BBP’s partnership
returns, Melvin and Russell reported one-half of partnership
items on their individual Federal income tax returns. This Court
has previously recognized that statements made in a Federal tax
return are generally considered an admission by the taxpayer and
will not be overcome without cogent evidence that they are wrong.
Estate of Hall v. Commissioner, 92 T.C. 312, 337-338 (1989); Lare
v. Commissioner, 62 T.C. 739, 750 (1974), affd. without published
opinion 521 F.2d 1399 (3d Cir. 1975); Gale v. Commissioner, T.C.
Memo. 2002-54.
20The estate’s amended Form 1041 for 1995 was stamped
received by the Internal Revenue Service in Austin, Texas, on
Mar. 7, 1997, more than 3 years after the date of Melvin’s death.
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