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interests nor contributed any property to the Bitker partnership,
the bases of their partnership interests are equal to their
respective shares of partnership debt. We disagree.
The 20-percent interests that petitioner wives acquired in
1991 included 20-percent interests in the Bitker partnership’s
existing capital--property interests that had been owned by their
husbands at the time the wives became partners. Under Minnesota
law, a presumption exists that money or property transferred by a
husband to his wife (or a parent to his/her child) is a gift.
State v. One Oldsmobile Two-Door Sedan, 35 N.W.2d 525 (Minn. 1948);
Stahn v. Stahn, 256 N.W. 137 (Minn. 1934); Jenning v. Rohde, 109
N.W. 597 (Minn. 1906); Kiecker v. Estate of Kiecker, 404 N.W.2d 881
(Minn. Ct. App. 1987); see also Matarese v. Commissioner, T.C.
Memo. 1975-184.
Here, the facts show that petitioner wives paid nothing for
their respective 20-percent interests in the Bitker partnership.
We conclude, therefore, that petitioner wives acquired their
interests in the Bitker partnership as gifts from their husbands.
Consequently, pursuant to section 1015(a), for purposes of
determining gain, the basis of each wife’s 20-percent interest was
two-fifths of her husband’s basis in his partnership interest.
This conclusion is supported by the fact that the Schedules K-1 for
1991 reflect that petitioner wives each held a 20-percent interest
for the entire year and that petitioner wives were each treated as
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