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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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