- 3 -
Intercoastal’s Deduction of Compensation Fee....... 39
Post-1982 Transactions of MIT 82................... 40
The Pettisanis’ Deductions of Interest
Payments......................................... 41
Illustration No. 2................................. 42
Purported Transactions--MIT 82..................... 42
Termination Agreement of MIT 82.................... 43
Partnership Income of MIT 82....................... 44
MIT 83.................................................. 46
MIT 83 Investors................................... 46
Organization and Management of MIT 83.............. 46
MIT 83 Employee Leasing Agreement.................. 50
Operation of MIT 83................................ 51
Tax Deductions..................................... 54
Other Developments................................. 55
Post-1983 Transactions of MIT 83................... 56
Illustration No. 3................................. 57
Investment Program--MIT 83......................... 57
Termination Agreement of MIT 83.................... 60
MIT 83 Income...................................... 60
MIT 84.................................................. 61
MIT 85.................................................. 68
MIT 86.................................................. 75
W & A Payroll Service................................... 82
The Investors........................................... 89
OPINION................................................. 92
I. Neither the Partners Nor the Partnerships
Are Entitled to Loss Deductions Based Upon
Payment of Machise's Payroll Costs ........... 93
A. The Requirement of Economic Substance...... 93
1. The Relationship of the Employees
and Independent Contractors to
Machise and to the Partnerships....... 95
2. Lack of Economic Substance of the
Employee Leasing Agreements........... 103
a. Structure of the Financing....... 104
b. Termination Agreements........... 110
c. Arm's-Length Negotiations........ 115
d. Adherence to Contractual
Terms............................ 119
e. Reasonableness of Income
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011