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If, upon a consideration of all the facts, it is found
that the partners joined together in good faith to
conduct a business, having agreed that the services or
capital to be contributed presently by each is of such
value to the partnership that the contributor should
participate in the distribution of profits, that is
sufficient. The Tower case did not purport to
authorize the Tax Court to substitute its judgment for
that of the parties; it simply furnished some guides to
the determination of their true intent. * * * [Id. at
744-745.]
We believe that, in the unique circumstances of this no-cash,
quick-turn-around real estate transaction, the parties agreed
that State Savings' commitment to stand ready to make necessary
loans was a service of sufficient value to warrant its inclusion
in a partnership. Having made this determination, we will heed
the Supreme Court's directive and decline to substitute our
judgment for that of the parties. The parties intended to, and
did, enter into a partnership valid for tax purposes.
The March 25, 1983, commitment letter from State Savings to
BCI, wherein State Savings promised to purchase the 70-Acre Tract
if State Savings could not make the requisite loans, supports our
conclusion. In effect, each party to the transaction stood ready
to (1) take title to the land and (2) share the profits equally
with the other partner. This willingness on the part of State
Savings to bear the risks associated with ownership removes it
from the realm of the ordinary lender.
Respondent contends that a number of factors preclude a
finding that BCI and State Savings entered into a partnership
valid for tax purposes. First, respondent emphasizes the absence
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