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393 F.2d 573 (9th Cir. 1968), affg. T.C. Memo. 1966-283); sec.
1.702-1(b), Income Tax Regs.
Section 761(a) defines a partnership for Federal income tax
purposes essentially as a group, joint venture, or other
unincorporated organization through which any business, financial
operation, or venture is carried on. See also sec. 7701(a)(2)
and sec. 1.761-1(a), Income Tax Regs., under which the term
"partnership" is defined more broadly than the common law meaning
of partnership.
Petitioners argue that our holding in Krause v.
Commissioner, supra, disallowing under section 183 claimed
partnership losses for lack of profit objective (and any holding
herein to the same effect with regard to Boulder, Tech-1979, and
Winfield) effectively constitutes a holding that the purported
partnerships did not constitute legal partnerships. Petitioners
argue therefrom that in the instant cases Boulder, Tech-1979, and
Winfield must be regarded by the Court as something other than
legal partnership entities and that a partnership entity level
analysis of profit objective should not be applied. Petitioners
argue further that the Court has no option in these cases but to
apply section 183 at the individual partner level with regard to
each and every partner in Boulder, Tech-1979, and Winfield.
Citing section 761(a) and section 301.7701-3(a), Proced. &
Admin. Regs., petitioners argue further that partnerships lacking
in profit objective are to be regarded as not engaged in any
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