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ES4LP’s balance sheet for 1998 included a schedule entitled
“Eugene E. Stone IV Limited Partnership, Transaction Detail by
Date, January through December 1998" (ES4LP’s 1998 transaction
schedule). ES4LP’s 1998 transaction schedule reflected a check
dated March 15, 1998, payable to the IRS, in the amount of
$496,642 and a check dated March 15, 1998, payable to the S.C.
Department of Revenue, in the amount of $133,029.48
The partnership return that CRSLP filed for 1998 reflected
that CRSLP did not make distributions during that year to any of
its partners.49 However, CRSLP’s “Trial Balance Worksheet--Ac
47(...continued)
Because of Mr. Stone’s death in 1997, in that year, as
reflected in the partnership return that ES4LP filed for 1997,
ES4LP opened a capital account for his estate (Mr. Stone’s
estate’s capital account in ES4LP), and the balances in Mr.
Stone’s capital accounts in ES4LP as a general partner and a
limited partner were transferred to Mr. Stone’s estate’s capital
account in ES4LP. The partnership return that ES4LP filed for
1997 showed that ES4LP made distributions during that year to
Eugene Earle Stone, IV, totaling $8,754 and that, except for the
above-discussed transfer to Mr. Stone’s estate’s capital account
in ES4LP, it did not make distributions during that year to any
of its other partners.
48The $496,642 distribution and the $133,029 distribution on
behalf of Mr. Stone’s estate shown in ES4LP’s 1998 transaction
schedule, when totaled, equal the total amount of Federal and
State estate taxes with respect to Mr. Stone’s estate (i.e.,
$629,671) that E&Y’s Estate tax allocation schedule reflected as
payable by ES4LP in 1998.
49Although not reflected as a distribution in CRSLP’s part-
nership return for 1998, because of Ms. Stone’s death in that
year, as reflected in the partnership return that CRSLP filed for
1998, CRSLP opened a capital account for Ms. Stone’s estate (Ms.
Stone’s estate’s capital account in CRSLP), and the balance in
(continued...)
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