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40 percent of the home expenses. The deductions were taken
because in an IRS audit for an earlier year, it was determined
that Austin used 40 percent of his home in his bridge-building
business and was entitled to deduct the cost of that portion.
KPLP also deducted the cost of Austin’s subscriptions to
newspapers and periodicals in each year.
The Korbys received Social Security income of $18,014 in
1995, $18,468 in 1996, $19,016 in 1997, and $16,751 in 1998. On
its Federal income tax returns and its books and records, KPLP
reported its interest and dividend income, value, and payments to
the living trust as follows:
Payments to
Year KPLP Income Living Trust KPLP Value
1995 $77,898 $30,387 $1,869,901
1996 72,434 19,334 2,185,581
1997 74,239 32,324 2,699,138
1998 77,343 38,750 12,625,821
1Value of KPLP assets on the date of Austin’s death.
KPLP reported distributions and guaranteed payments during 1995,
1996, 1997, and 1998 as follows:
Guaranteed Distributions Distributions
Year Pymts to GP to GP to LPs
1995 None $30,387 None
1996 $19,334 None None
1997 32,324 None None
1998 38,750 None $12,061
KPLP did not report any guaranteed payments to limited partners
in any year. KPLP paid $18,104.76 in 1996 and $4,400 in 1997 for
income taxes owed by its limited partners. In 1998, KPLP paid
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Last modified: May 25, 2011