Tim H. Cusick - Page 7

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          of the ingredients of income--capital or services."  Commissioner           
          v. Culbertson, supra at 740.                                                
               Whether parties have formed a partnership is a question of             
          fact, and while all circumstances are to be considered, the                 
          essential question is whether the parties intended to, and did in           
          fact, join together for the present conduct of an undertaking or            
          enterprise.  Luna v. Commissioner, 42 T.C. 1067, 1077 (1964);               
          Gabriel v. Commissioner, T.C. Memo. 1993-524; see also                      
          Commissioner v. Tower, supra at 287.                                        
               In deciding whether two or more persons have formed a                  
          partnership, the Supreme Court has stated:                                  
                    The question is not whether the services or                       
               capital contributed by a partner are of sufficient                     
               importance to meet some objective standard * * * but                   
               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, supra at 742.]                                          
          See also Luna v. Commissioner, supra at 1077-1078.                          
               Recognition of a partnership for Federal tax purposes also             
          requires that the parties conduct some business activity.  See              
          Madison Gas & Elec. Co. v. Commissioner, 633 F.2d 512, 514-517              
          (7th Cir. 1980), affg. 72 T.C. 521 (1979); Frazell v.                       
          Commissioner, supra at 1412.  While it is well settled that mere            




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