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petitioner’s Federal tax returns that are in the record indicates
that he earned income from rendering services as a promoter.
Although petitioner claims that he had a reputation in his
community as a promoter, there is little evidence in the record
to support that claim, and the absence of any indication that
petitioner was separately compensated for his activities renders
that evidence unpersuasive. Deely v. Commissioner, supra at
1096.
Petitioner points to his activities outside his medical
practice to show that he was engaged in the trade or business of
being a business promoter, but the activities do not indicate
that petitioner was in that trade or business. Although
petitioner was involved in building and selling houses on
speculation prior to his dealings with Color Trick, the record
does not indicate how he was compensated for his efforts, that
is, whether he received compensation directly for his services,
or indirectly through the success of the ventures. Moreover,
that activity had ceased in 1984 or 1985, and it therefore does
not indicate that petitioner was involved in a business of
developing properties for quick sale during 1987, when he became
involved with Color Trick. Petitioner’s other activities, such
as his ownership of an apartment building and his investment in
Cinevision, do not indicate that he engaged in promoting
corporations for a fee or commission or for the profit to be
derived from quickly selling them after they were established.
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Last modified: May 25, 2011