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general partner of each limited partnership, was personally
liable for the withholding tax due because he was a withholding
agent under section 1442. Sec. 1461.
Each limited partnership was formed under the laws of a
State of the United States and operated using a calendar year.
Once an idea was selected and assigned to a limited partnership,
petitioner, acting as the general partner of each limited
partnership,3 negotiated a research and development contract with
A-Alpha, a Hong Kong limited liability company formed under the
laws of Hong Kong. Capital was raised from investors by selling
limited partnerships interests, which represented 50 percent of
the limited partnerships. The interests sold varied in amount
but were typically between $10,000 and $20,000. Additionally,
each investor agreed to become personally liable for 125 percent
of the investor's cash investment. Once the capital was raised,
the limited partnerships obtained loans from Wells Fargo Bank.
The total amount of capital raised ranged from $400,000 to
$800,000. This amount was then paid (less attorney's fees and
other expenses) to A-Alpha.
2(...continued)
Kong.
3 Petitioner contends that he was not the general partner
of certain of the limited partnerships formed in 1980. This is a
factual dispute, and we resolve it in favor of respondent, the
nonmoving party. Elias v. Commissioner, 100 T.C. 510, 514
(1993).
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