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7. Operation of RLP
RLP operated without a business plan or an investment
strategy, and it did not trade or acquire investments. RLP also
issued no balance sheets, income statements, or other financial
statements. RLP’s partners did not hold formal meetings.
RLP functioned to own investment accounts, to make
distributions to partners, and to pay decedent’s personal
expenses (directly during 1999 and indirectly in later years).
RLP maintained monthly statements of investment account activity,
including distributions, and a handwritten check register for
payments. Statements of activity and capital accounts were not
regularly maintained.
8. Summary of RLP Distributions
From its formation through December 11, 2001, RLP made
distributions to its partners. During each of 1999, 2000, and
2001, RLP’s total distributions to its partners exceeded RLP’s
annual net income by $491,480. Of the total distributions, 86 to
90 percent were made to decedent during 1999 and 2000. RLP’s
distributions to each partner represented the following
percentages of RLP’s net income for each year:
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Last modified: March 27, 2008