Inverworld, Inc., et al. - Page 85

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            864(b) during the taxable years in issue.  We examine separately                              
            the activities of LTD’s trade or business relating to each of the                             
            commissions and fees.  For the following reasons, we hold that in                             
            each of the following commission or fee income categories, the                                
            associated activities of LTD’s trade or business were a material                              
            factor in the realization of such commission or fee:                                          
                  Currency Fund:  LTD accepted clients’ deposits, opened an                               
            account with a foreign bank, and issued periodic statements to                                
            clients.                                                                                      
                  FEIM Fund:  LTD accepted clients’ deposits, transferred such                            
            deposits to Merrill Lynch, and issued periodic statements to                                  
            clients.                                                                                      
                  Matric Fund:  LTD handled the paperwork and general                                     
            administration and distributed the interest payments to the                                   
            investors.                                                                                    
                  Inversat Fund:  LTD accepted clients' deposits, transferred                             
            the funds from Inversat Fund to Inversat REIT, and provided                                   
            general investment management.                                                                
                  TVA administration fee:  LTD instructed INC to pay TVA a                                
            monthly stipend to cover its development expenses and                                         
            administered the funds raised in the capital call itself.                                     
                  Client incorporation and trust creation and legal advice                                
            income:  LTD counseled clients regarding the proper entity for                                
            their investments and handled the paperwork, including arranging                              
            legal services from third parties.                                                            




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