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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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