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expected or was entitled to any direct compensation for his
services. Although petitioner contended that he did not do so
because of Color Trick’s financial problems, there is no evidence
that he was owed any salary for his services or that he deferred
collecting any salary due him. We conclude from the record as a
whole that petitioner expected only an investor’s return from
Color Trick in the form of dividends or long-term enhanced value
of his shareholdings.
It does not appear that petitioner planned to sell Color
Trick quickly once it became established. Indeed, there is some
question whether the business could have been sold, because
Leland Prentice was allowed to use his process in only two
locations but was not allowed to market it. Rather, an effort
was made to sell the business only after petitioner decided that
it would not be successful and that he could not continue
financing it.
Petitioner also contends that he made advances to Color
Trick in order to protect his business reputation after he had
induced other physicians in the medical group to invest in Color
Trick.3 As noted above, we cannot conclude from the record in
the instant case that petitioner had a reputation as a business
3
Petitioner does not contend that the investments in Color
Trick by other physicians with whom he practiced rendered his
advances to Color Trick proximately related to his medical
practice, or that his medical practice would be in any way
affected by the fate of Color Trick.
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