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financial operation, or venture and divide the profits
thereof. For example, a partnership exists if co-
owners of an apartment building lease space and in
addition provide services to the occupants either
directly or through an agent. * * * [Sec. 1.761-1(a),
Income Tax Regs.]
See also sec. 301.7701-3, Proced. & Admin. Regs. Petitioners
bear the burden of proving that a partnership did not exist.
Rule 142(a); Welch v. Helvering, 290 U.S. 111 (1933); Demirjian
v. Commissioner, 54 T.C. 1691, 1696 (1970), affd. 457 F.2d 1 (3d
Cir. 1972).
In determining whether a particular relationship between
persons constitutes a partnership for tax purposes, the intent of
the persons involved is the controlling factor. Commissioner v.
Tower, supra at 286-287. Since intent is a subjective matter not
readily discernable by a trier of fact, a court must rely on
objective acts as evidence of intent. Burde v. Commissioner, 43
T.C. 252, 266 (1964), affd. 352 F.2d 995 (2d Cir. 1965). Factors
relied upon by this Court include:
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
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