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payments made in each of the taxable years. The members' equity
accounts increased each year by an amount no less than the
transfer fees collected.
Respondent argues that the members cannot have an investment
motive because they enjoy no right to any return of the amount of
transfer fees paid in connection with that membership. We are
not persuaded. There is no requirement that the payments
directly increase the individual payor's equity interest on a
dollar-for-dollar basis. Nor is there any requirement that a
member must have a right to recover from petitioner the amount of
the transfer fee paid.21 Although an individual member's
interest does not directly reflect the amount of transfer fees
paid in connection with that membership, members' equity as a
whole is increased by each transfer fee paid. See Concord
Village, Inc. v. Commissioner, 65 T.C. 142, 156 (1975). We are
21 Respondent seems to be arguing that, in order for the
transfer fees to be capital contributions, petitioner must
maintain a capital account for each member that directly reflects
the actual amounts paid in respect of that particular membership
interest. Petitioner is a corporation, not a partnership. There
is no such requirement for corporations. A corporation is a
separate legal entity, whereas a partnership is an aggregate of
its partners. Partnership capital accounts reflect what each
partner can draw from the partnership. A corporation does not
have individual drawing accounts for each of its shareholders.
Any shareholder simply has an ownership interest in this separate
entity represented by the number of shares owned by him.
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