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certificates of ownership reflecting these transfers were not
prepared and signed until several weeks after the transfers.
By fax dated December 22, 1999, petitioners informed their
accountant that they had transferred stock to SFLP II and sought
advice as to the percentage of partnership interests they should
transfer to the children to maximize their annual gift tax
exclusions and use all of their remaining unified credits.
On January 31, 2000, petitioner gave to each child, in
trust, an additional 4.5-percent limited partnership interest in
SFLP II.
The SFLP II Agreement provides that petitioner, as general
partner, shall keep the financial statements of the partnership
for the most recent 3 fiscal years. SFLP II has never had annual
financial statements prepared. The only books and records
maintained by petitioner, as general partner, were brokerage
account statements and partnership tax returns. The 1999
Form 1065 for SFLP II was signed by the tax return preparer on
August 30, 2000.
Petitioner paid all legal fees and filing costs with respect
to SFLP I and SFLP II. The partnerships did not reimburse those
costs to petitioner, nor were those costs a liability of the
partnerships.
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