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relating to FMS and the management company and filed a refund
suit in the United States District Court for the Middle District
of Florida. On June 10, 1998, the District Court entered a
judgment against petitioner and determined that petitioner
transferred his shares in FMS and the management company to Smith
and Fowler on June 30, 1990. On November 16, 1999, the Court of
Appeals for the Eleventh Circuit affirmed the District Court’s
judgment.
At the time the petition was filed, the partnership
maintained its principal place of business in Naples, Florida.
OPINION
Petitioner contends that on January 12, 1989, the 1989
agreement divested him of his partnership interest.2 Respondent
contends that petitioner was not divested of his interest until
June 30, 1990, the date of the purchase agreement. We agree with
respondent.
In 1986, Smith and Fowler voted to remove petitioner from
his management position. In 1987, petitioner filed a lawsuit for
damages and ultimately reached a settlement with Smith and
Fowler. The 1989 agreement provided a number of options to
effect the change in ownership of the partnership. Petitioner’s
2 Sec. 7491 is inapplicable because the examination of
petitioner's returns began before the statute's effective date.
Thus, petitioner bears the burden of proof on all questions of
fact. Rule 142(a); Monahan v. Commissioner, 109 T.C. 235, 236
(1997).
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