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December 22, 1994, Betsy and George contributed Woodlands Property
to the Turner Partnership. Before contributing Woodlands Property
to the partnership, the Turners placed on the property a
conservation easement that prohibited the cutting or removal of
trees from the property.8
5. Woodside Properties Partnership Interest
Betsy and George each held a 35-percent partnership interest
in a real estate partnership known as Woodside Properties. Phoebe
held the remaining 30-percent partnership interest. Woodside
Properties consisted of six residential apartment units in two
buildings located in West Chester, Pennsylvania. Woodside
Properties’ real estate was titled in the names of Phoebe and
Betsy. Phoebe was the managing partner and listing agent for
Woodside Properties.
In December 1994, Betsy and George each assigned their
interests in Woodside Properties to the Turner Partnership. After
the assignment, Woodside Properties’ real estate remained titled in
the names of Phoebe and Betsy.
8 In 1997, Betsy and George listed Woodside Farm for sale
and included the 22-acre Woodlands Property. Woodside Farm and
Woodlands Property were sold to a single purchaser for a gross
sales price of $550,000. After reduction for settlement charges
($43,586) and the first mortgage loan ($198,274), Betsy and George
received net proceeds of $312,351. Upon the sale of the property,
Betsy and George allocated to the Turner Partnership $12,351 of the
Woodside Farm/Woodlands Property sales proceeds, which amount
equaled the partnership’s adjusted basis in the Woodlands Property.
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