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OPINION
Under sections 761(a) and 7701(a)(2), a partnership is
defined to include a syndicate, group, pool, or joint venture by
means of which a number of individuals or entities jointly
conduct a business, financial operation, or financial venture in
a form other than a corporation, trust, or estate. Whether a
partnership exists for purposes of Federal income taxation is a
matter of Federal, not local, law. Estate of Kahn v.
Commissioner, 499 F.2d 1186, 1189 (2d Cir. 1974), affg. T.C.
Memo. 1972-240; sec. 301.7701-1(c), Proced. & Admin. Regs.
A partnership will be found to exist where two or more
parties, acting in good faith and with a business purpose, intend
to and do join together in the conduct of a business enterprise.
Commissioner v. Culbertson, 337 U.S. 733, 742 (1949). The
crucial test is whether, based on all the facts and
circumstances, the parties intended to operate as a partnership.
Id.; Estate of Levine v. Commissioner, 72 T.C. 780, 785 (1979),
affd. 634 F.2d 12 (2d Cir. 1980).
Factors generally considered in determining the parties'
intent to operate as a partnership include the terms of the
agreement, whether each party jointly made financial
contributions, whether the parties had joint control over income
and capital and had the right to make withdrawals, whether the
parties held the activity out to the public as a partnership, and
whether the parties filed Federal partnership returns. Estate of
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Last modified: May 25, 2011