- 48 -
contends that any basis Russell had in his partnership interest
as of January 1, 1994, would have been rapidly depleted by the
partners’ distribution of assets in anticipation of Melvin’s
death.
At trial, both Russell and Mr. Feldmann testified that
Russell had withdrawn considerably less money than Melvin had
from BBP. Mr. Feldmann testified that he was aware of the two
loans totaling approximately $800,000 and that he believed that
Russell paid off one-half of the debt sometime after Melvin’s
death. Mr. Feldmann testified that he attempted to calculate
Russell’s basis in BBP, and, although he could not determine a
specific amount, he believed that Russell had a positive basis in
BBP after receiving the grain sales proceeds in 1994.
BBP’s records are insufficient to determine each partner’s
relative capital contributions and the amount of distributions
made to each partner over the life of the partnership. The
evidence in the record reflects that, during BBP’s existence,
Melvin and Russell generally allowed each other to withdraw the
profits from the respective activities they conducted, and, at
least for the years 1980 through 1994, the oil and gas activity
was more profitable overall than the farming activity. The
partnership tax returns and the fact that Melvin and Russell
generally kept the profits from their respective activities
support Russell’s and Mr. Feldman’s testimony that, with respect
Page: Previous 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 NextLast modified: May 25, 2011