-45-
partnership level. Rosenfeld v. Commissioner, 82 T.C. 105, 112
(1984); Brannen v. Commissioner, 78 T.C. 471, 505 (1982), affd. 722
F.2d 695 (11th Cir. 1984); Hager v. Commissioner, 76 T.C. 759, 784
(1981). A partnership’s profit motivation is determined by
reference to the actions of the general partners who manage the
affairs of the partnership. See Resnik v. Commissioner, 66 T.C. 74
(1976), affd. per curiam 555 F.2d 634 (7th Cir. 1977).
In Ewing v. Commissioner, supra at 417-418, it was established
that profit must be the taxpayer’s primary motive in order for a
loss from a particular straddle transaction to be deductible. In
Ewing we also set forth the following additional guidelines, taken
from Fox v. Commissioner, 82 T.C. 1001 (1984):
(1) The ultimate issue is profit motive and not
profit potential. However, profit potential is a
relevant factor to be considered in determining profit
motive. 82 T.C. at 1021.
(2) Profit motive refers to economic profit
independent of tax savings. 82 T.C. at 1022.
(3) The determination of profit motive must be made
with reference to the spread positions of the straddle
and not merely to the losing legs, since it is the
overall scheme which determines the deductibility or
nondeductibility of the loss. 82 T.C. at 1018, citing
Smith v. Commissioner, 78 T.C. at 390-391.
(4) If there are two or more motives, it must be
determined which is primary, or of first importance. The
determination is essentially factual, and greater weight
is to be given to objective facts than to self-serving
statements characterizing intent. 82 T.C. at 1022.
(5) Because the statute speaks of motive in
“entering” a transaction, the main focus must be at the
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