Billie and Florence Lykins - Page 12

          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,            
               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               
               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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