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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                

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