J. Ramsay Farah and Elizabeth Farah - Page 24

          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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