-4- petitioners contend. The contract for sale lists the purchase price as $315,000. The form HUD-1 settlement sheet issued at the closing also lists the total purchase price as $315,000. An addendum to the contract provides that $50,000 is to be paid for “personal property not specifically included in the contract for purchase.” Petitioners executed a promissory note in the amount of $50,000 in favor of the sellers. The note carried a term of 5 years and called for $5,000 of interest to be paid. Over the years, petitioners made significant improvements to the Berlin house, costing a total of $274,375, to make it a suitable retirement home. In addition to improving the house, petitioners required additional land for a yard and septic drainage field as most of the property surrounding the Berlin house was marshland. To that end, petitioners planned to purchase the 2.39 acre unimproved lot adjacent to the Berlin house, known as Lot 1, Minor Subdivision of W.V. Krewatch Land, South Point Road Berlin, Maryland (South Point Road lot). On April 6, 1991, on the advice of counsel, petitioners formed the J. Ramsay Farah Family Partnership (Family Partnership), a Maryland general partnership for the purpose of owning and developing the South Point Road lot. Petitioners purchased the land through the partnership to help protect the property from liabilities arising from Dr. Farah’s medical practice. Dr. Farah was told by counsel that holding the landPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 NextLast modified: March 27, 2008