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demonstrated by the record, relating to the funding, operations,
and distributions of the partnership so that decedent retained
the right to the income of the partnership.
During 1997, decedent received $99,363 in distributions from
the partnership, and Hillgren received no distributions. When
questioned by the estate’s counsel, Hillgren described the
situation surrounding the disproportionate distributions as
follows:
Q Would you tell us about those cash distributions?
Were they disproportionate, and if so, why?
A To date, to her date of death, they were, in fact,
disproportionate. I took no distributions. She took
all of them.
Q And why did you distribute entirely to her, and
nothing to you?
A Well, in that I had a 25 percent--it was a
calculated number, and we didn’t have--obviously, the
books--we were only five months into the or six months
into the accounting year. We had no information as to
what my 25 percent would be.
Q Why didn’t you then withhold distributions to
either of you until those numbers could be calculated?
A Well, the distributions were discretionary on my
part. If we had erred, and distributed too much, for
example, it would have just gone against he--or would
gone into my--added to my capital account. So it would
have worked out in the end eventually, if we had made
that mistake, and overdistributed.
Q Well, let’s see if I understand it. Why did you
distribute anything to her?
A All of the--all of her income producing assets
were in the partnership. So her--that’s what she
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