-15- with a trade or business or (B) a debt, "the loss from the worthlessness of which is incurred in the taxpayer's trade or business." We must therefore decide the nature of petitioner's relationship with Ms. Jackson and/or her corporate entity; i.e., whether he was a joint venturer, creditor, investor, stockholder, etc. Petitioner contends that he was a joint venturer. As a guide to answering this type of question, courts have focused generally on whether the parties intended to and did join together for the accomplishment of a specific enterprise. Commissioner v. Culbertson, 337 U.S. 733 (1949). Some of the factors to be considered are set forth in the following oft- quoted language of Luna v. Commissioner, 42 T.C. 1067, 1077-1078 (1964): The agreement of the parties and their conduct in executing its terms; the contributions, if any, which each party has made to the venture; the parties’ control over income and capital and the right of each to make withdrawals; whether each party was a principal and coproprietor, sharing a mutual proprietary interest in the net profits and having an obligation to share losses, or whether one party was the agent or employee of the other, receiving for his services contingent compensation in the form of a percentage of income; whether business was conducted in the joint names of the parties; whether the parties filed Federal partnership returns or otherwise represented to respondent or to persons with whom they dealt that they were joint venturers; whether separate books of account were maintained for the venture; and whether the parties exercised mutual control over and assumed mutual responsibilities for the enterprise.Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
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