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capitalized. Organizational costs, if elected, are amortizable,
but syndication costs are not amortizable. See secs. 263, 709.
Petitioners have the burden of proving what portion of the fee is
allocable to nondeductible capital portions and to deductible
expense portions, and such allocation must reasonably comport
with the value of the services performed. See Durkin v.
Commissioner, supra at 1389. Any fee for services to be rendered
in the future is not deductible in the year of expenditure. See
id. Whether payments to a partner represent a reasonable
compensation for services is a question of fact to be determined
on the basis of the particular circumstances of each case. See
id.
In the instant cases, the evidence presented on the payments
these partnerships made to Mr. Hoyt during the years in issue is
most unsatisfactory. The record includes only a copy of RCR #4's
partnership agreement. It provides that the managing general
partner, Mr. Hoyt, is to receive a fee equal to 15 percent of
that partnership's profits upon the sale and distribution of all
partnership assets. Copies of the partnership agreements of the
other partnership are not in the record.
Mr. Hoyt testified that he received payments from each
partnership, and that he reported these payments as income on his
individual Federal returns. He further stated that these
payments were of two types. According to him, the first type of
payment he received was equal to 1 percent of a partnership's
reported gross farm receipts. The second type of payment he
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