The Cleveland Trencher Company - Page 10

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          find that petitioner has not carried its burden of showing that             
          the all events test was satisfied during the taxable year.                  
          Issue 2.  Related Party Objection to the Deduction                          
               The parties dispute what kind of business entity AA&H was              
          and how great Mr. Aydin's ownership interest in it was.                     
          Respondent claims AA&H is Mr. Aydin's sole proprietorship.                  
          Petitioner claims that AA&H is a Turkish business entity, of                
          unspecified nature, which operated as petitioner's agent in the             
          Republic of Turkey as a "ghost company" (trading in Turkey with             
          an address and attorney in Turkey), in which Mr. Aydin held a 25-           
          percent interest with an option to purchase an additional 12.5-             
               AA&H is either a sole proprietorship, a partnership, or a              
          corporation.  The record does not enable us to determine which of           
          these it is.4  If AA&H were a sole proprietorship, then it would            
          be identical for tax purposes with Mr. Aydin, who, as a resident            

          petitioner, sec. 382 renders petitioner unable to claim a net               
          operating loss deduction for any such carryover.  Cf. Berry                 
          Petroleum Co. & Subs. v. Commissioner, 104 T.C. 584 (1995).                 
               4Turkey has the panoply of forms of business enterprise                
          characteristic of civil law systems, including corporations                 
          (Anonim �irketler), limited liability companies (Limited                    
          �irketler), general partnerships (Kollektif �irketler), limited             
          partnerships (Komandit �irketler), and sole proprietorships.                
          Schneider & Bilgen, Foreign Investment Laws in the Republic of              
          Turkey:  A Model for Reform, 5 Transnatl. Law. 99, 116-117                  
          (1992).  Mr. Aydin testified to AA&H's being a "ghost company",             
          but we have no way of knowing to which of these forms that                  
          characterization would correspond.                                          

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