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a trade or business, and that the worthless debt was proximately
related to that trade or business.
Respondent contends that the debt was not acquired or
created while petitioner was in the trade or business of leasing
equipment because petitioner advanced funds to Tag Coal on August
30, 1984, and did not become a partner in J & M until October 1,
1984.
It is true that the October 1, 1984, agreement was the first
written instrument reflecting petitioner's 50-percent partnership
interest in J & M. However, based on the record as a whole, we
think that petitioner was in the trade or business of leasing
equipment and was acting as a partner in J & M prior to actually
executing the October 1, 1984, agreement. In this regard, the
record demonstrates that petitioner and Mr. Templeman had orally
agreed, no later than August 30, 1984, that they were equal
partners in J & M. The intent of Mr. Templeman and petitioner to
create an equal partnership before October 1, 1984, is supported
by objective evidence, most significantly by the fact that
petitioner was performing important services on behalf of J & M
by August 30, 1984. For example, petitioner negotiated contracts
for J & M and supplied J & M's equipment to the partnership's
lessees.
Further, we think that the August 27, 1984, agreement, the
October 1, 1984, agreement, and the discussions surrounding these
agreements, represented a single effort designed to convey a 50-
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