- 5 - Edna, and each of their sons signed the KPLP limited partnership agreement (the KPLP agreement) as limited partners on March 26, 1994. The living trust was the sole general partner of KPLP from its formation until 1999. Austin and Dennis signed the KPLP agreement as cotrustees of the living trust. The KPLP agreement provided for management fees to be paid to the general partner “to be measured by the time required to manage and administer the partnership, by the value of property under the general partner(s) administration, and by the responsibilities the general partner(s) assume in discharging of the duties of office.” The general partner was to decide the amounts of the management fees. The KPLP agreement also required KPLP to reimburse the general partner for “all reasonable and necessary business expenses incurred in managing and administering the partnership.” KPLP was not funded and did not commence business until spring 1995; therefore, KPLP did not file a tax return for 1994. In 1995, the living trust transferred the money market account with a balance of $37,841 to KPLP. In exchange, the living trust received a 2-percent general partnership interest. Also in 1995, the Korbys transferred the following assets to KPLP: (1) Stocks valued at $1,330,442; (2) State and municipal bonds valued at $449,378; and (3) U.S. savings bonds worth $71,043 (thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011