Max J. Kuney, Jr., and Constance F. Kuney v. United States

OPINION

Before LUMBARD, * MERRILL and WRIGHT, Circuit Judges. MERRILL, Circuit Judge:

This is the third occasion on which we have considered the Kuney family partnership, the trusts created of partnership interests 1 and the tax consequences of the manner in which a division of income has thus been accomplished.

Section 704(e)(1) of the Internal Revenue Code of 1954, 26 U.S.C. § 704(e)(1), dealing with family partnerships, recognizes that a partnership interest can, for .tax purposes, be created by gift.

“Recognition of interest created by purchase or gift. — A person shall be recognized as a…