Allen C. Chamberlin and Martha L. Chamberlin - Page 25

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               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               

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Last modified: May 25, 2011