70 Acre Recognition Equipment Partnership, Booth Creek Investment, Inc., Tax Matters Partner - Page 7

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               As a preliminary matter, we consider respondent's contention           
          that petitioner's agent Coopers & Lybrand has admitted the                  
          nonexistence of a valid partnership.  In a letter to respondent,            
          Coopers & Lybrand stated that they agreed with respondent's                 
          determination that BCI and State Savings had not formed a valid             
          partnership.  This letter represents nothing more than an                   
          accountant's conclusion after applying law to facts.  We must               
          conduct our own analysis.                                                   
               Representatives of BCI and State Savings testified that they           
          intended to form a partnership at the time of the transaction,              
          and we found them to be highly credible witnesses.  The parties             
          agreed that BCI would contribute real estate expertise and manage           
          the property, while State Savings would make funds available for            
          the acquisition or development of the 70-Acre Tract.  In                    
          addition, the partnership filed contemporaneous information                 
          returns and issued Schedules K-1.                                           
               Respondent contends that State Savings contributed nothing             
          of value to the partnership.  Petitioner contends, however, that            
          the parties to the transaction considered State Savings'                    
          commitment to make funds available a contribution of a valuable             
          service.  The Supreme Court has indicated that the services or              
          capital contributed by a partner need not meet an objective                 
          standard.  See Commissioner v. Culbertson, supra at 742-743.  The           
          Court further stated:                                                       






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