- 25 -
In Fleischaker v. Commissioner, T.C. Memo. 1999-427, this
Court found that a taxpayer was not engaged in the trade or
business of promoting business ventures. In Fleischaker, the
taxpayer guaranteed several loans made to an adult assisted-
living center so that the corporation could build its facilities
and cover operating expenses. The taxpayer based his investments
on his belief that the demand for adult assisted-living centers
would steadily increase due to the growing population of American
senior citizens. The taxpayer intended to acquire interests in
multiple adult assisted-living centers throughout the country and
profit from his long-term stock ownership.
Petitioner has failed to show that he acquired his business
ventures with an intent to sell them in the near future for
profit. Instead, petitioner testified that he intended to build
The Chamberlin Corp. into a much larger corporation and to hold
the corporation for an extended amount of time. Petitioner
testified that his motive for engaging in The Chamberlin Corp.
venture was his belief that the demand for generic
pharmaceuticals would steadily increase throughout the 1980's and
that anyone positioned in the generic pharmaceutical market would
stand to make a large sum of money. Petitioner was not paid
compensation for his services to the corporation. His activities
are more analogous to those of an investor attempting to reap
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011