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formed. They stipulated that the partners were petitioners and
two of their children, and that the partnership purchased the
South Point Road lot.
Petitioners argue that because their children did not sign
the partnership agreement, contribute to the partnership, and
that the partnership did not register with the state or receive
an employee identification number, the partnership was not fully
implemented. In determining whether a partnership exists under
Maryland law, the controlling factor is the intent of the
partners to create a partnership. Cohen v. Orlove, 57 A.2d 810,
812 (Md. 1948). Petitioners admit they intended to form a
partnership to insulate the property from attachment by judgment
creditors. Their minor children were central to that goal
because petitioners believed partial ownership by the children
would make the property less susceptible to attachment by
judgment creditors.
Although petitioners’ children did not make contributions to
the partnership, partnerships that are created by gift may be
recognized for Federal tax purposes. See sec. 704(e); sec.
1.704-1(e), Income Tax Regs. That the partnership never
registered with the State of Maryland, nor obtained an employee
identification number is not dispositive.
At all relevant times, petitioners represented that the
property was held by the Family Partnership. It was not until
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