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activities. Petitioner’s brief states: “The evidence in the
administrative file demonstrates that * * * [the Operating
Partnership] has been operated in an exclusively charitable
manner since 1990". Therefore, petitioner concludes, it should
be deemed to operate exclusively for charitable purposes.
We disagree with petitioner’s thesis. It is patently clear
that the Operating Partnership, whatever charitable benefits it
may produce, is not operated “in an exclusively charitable
manner”. As stated by Justice Cardozo (then Justice of the New
York Court of Appeals), in describing one of the “ancient
principles” of charitable trusts, “It is only when income may be
applied to the profit of the founders that business has a
beginning and charity an end.” Butterworth v. Keeler, 219 N.Y.
446, 449-450, 114 N.E. 803, 804 (1916). The Operating
Partnership's income is, of course, applied to the profit of
petitioner’s co-general partner and the numerous limited
partners.10 It is no answer to say that none of petitioner’s
income from this activity was applied to private interests, for
the activity is indivisible, and no discrete part of the
Operating Partnership's income-producing activities is severable
10 In making these observations, we are mindful that it is
the status of petitioner, not of the General Partnership or the
Operating Partnership, that is in issue. Indeed, it is not
meaningful to speak of a partnership’s exempt status, given that
partnerships are nontaxable entities. See sec. 701.
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