- 28 -28
or recognized upon the sale of the * * * [PPNs]." Accordingly,
the primary issue is whether Barber and Dominguito are partners
with AlliedSignal and ASIC.5
OPINION
I. Applicable Law
The Internal Revenue Code provides that a partnership
includes "a syndicate, group, pool, joint venture or other
unincorporated organization through or by means of which any
business, financial operation, or venture is carried on". Secs.
761(a); 7701(a)(2). The existence of a valid partnership depends
on whether:
considering all the facts--the agreement, the conduct
of the parties in execution of its provisions, their
statements, the testimony of disinterested persons, the
relationship of the parties, their respective abilities
and capital contributions, the actual control of income
and the purposes for which it is used, and any other
facts throwing light on their true intent--the parties
in good faith and acting with a business purpose
intended to join together in the present conduct of the
enterprise.
Commissioner v. Culbertson, 337 U.S. 733, 742 (1949); Maiatico v.
Commissioner, 183 F.2d 836, 838 (D.C. Cir. 1950), remanding 12
T.C. 196 (1949).
II. The Parties
For purposes of our analysis, we disregard Barber and
5 Because we agree with respondent's primary contention, we
need not decide the economic substance issue. Cf. ACM
Partnership v. Commissioner, T.C. Memo. 1997-115 (addressing the
economic substance issue in a similar transaction).
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