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524; Marinos v. Commissioner, T.C. Memo. 1989-492. Sec.
1.761-1(a), Income Tax Regs.; sec. 301.7701-3(a), Proced.
& Admin. Regs. The regulations in this regard provide as
follows:
A joint undertaking merely to share expenses is
not a partnership. For example, if two or more
persons jointly construct a ditch merely to drain
surface water from their properties, they are not
partners. Mere co-ownership of property which is
maintained, kept in repair, and rented or leased
does not constitute a partnership. For example,
if an individual owner, or tenants in common, of
farm property lease it to a farmer for a cash
rental or a share of the crops, they do not
necessarily create a partnership thereby.
Tenants in common, however, may be partners if
they actively carry on a trade, business,
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(a), Proced. & Admin.
Regs.]
In Marinos v. Commissioner, supra, this Court stated that
"The regulations and relevant case law indicate the
distinction between mere co-owners and co-owners who are
engaged in a partnership lies in the degree of business
activity of the co-owners or their agents."
In this case, based upon the credible testimony of
petitioners' witnesses, we find that the Winklers engaged
in the activity of pooling their money to purchase family
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