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inadvertent, Brunswick would have requested a refund from ABN.
However, petitioner does not suggest that Brunswick requested
such a refund. Considering all the circumstances, we conclude
that Brunswick was fully cognizant of, and acquiesced in, the
transfer of a $535,000 fee to ABN as remuneration for its
participation in the partnerships.
The fact that Brunswick assented to the transfer of $535,000
to ABN leads us to conclude that Brunswick also used the
previously mentioned consulting fees and the Otrabanda control
premium as disguised means to transfer additional amounts to ABN.
Brunswick had the motive and the opportunity to inflate those
payments to provide ABN remuneration for its participation in the
partnerships. Under the circumstances, we conclude that they did
so.
Petitioner argues in the alternative that, even assuming
that Brunswick made payments to ABN, such payments only provided
ABN with a minimum guaranteed return. Petitioner cites S.& M.
Plumbing v. Commissioner, 55 T.C. 702, 703 (1971), and
Hunt v. Commissioner, T.C. Memo. 1990-248, for the proposition
that a guaranteed minimum payment is not inconsistent with
partnership status. Petitioner’s reliance on the aforementioned
cases is misplaced.
Suffice it to say that, when an ostensible partner is
guaranteed a specified or minimum return on its capital
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