-8-
None of the partners of Funny Hats contributed any asset to Funny
Hats upon its formation. Later on December 10, 1993, decedent
transferred her entire interest in the residence to Funny Hats
for no consideration.5 Immediately before that transfer,
decedent, in her capacity as executrix of John Disbrow’s estate,
had transferred the residence to herself from John Disbrow’s
estate. As of the time of decedent’s transfer of the residence
to Funny Hats, the partners of Funny Hats had assured decedent
that she could continue to live at the residence as long as she
furnished the funds necessary to maintain it.
By way of an agreement dated January 1, 1994, decedent gave
her 28.125-percent interest in Funny Hats to her children and
children-in-law (collectively, donees). In accordance with that
agreement, the change to each partner’s interest in Funny Hats
was as follows:
Initial Subsequent
Partner Partnership Interest Partnership Interest
Martha Johnson 7.1875% 10%
Robert Johnson 7.1875 10
Nancy Kerrigan 7.1875 10
Patrick Kerrigan 7.1875 10
Linda Labet 7.1875 10
Michael Labet 7.1875 10
David Wishart 7.1875 10
Sarah Disbrow 7.1875 10
David Disbrow 14.3750 20
Decedent 28.1250 0
100.0000 100
5 As reported on the Federal estate tax return, decedent’s
adjusted basis in the residence was $350,000.
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