- 5 -
1987), affg. T.C. Memo. 1986-156; Krause v. Commissioner, supra
at 168 (and cases cited therein); Drobny v. Commissioner, 86 T.C.
1326, 1341 (1986) (motion to vacate denied at T.C. Memo. 1995-
209, affd. 113 F.3d 670 (7th Cir. 1997)); Brannen v.
Commissioner, 78 T.C. 471, 505 (1982), affd. 722 F.2d 695 (llth
Cir. 1984); Hager v. Commissioner, 76 T.C. 759, 782 n.11 (1981).
In analyzing economic substance and the profit objective
test, courts focus on actions of the partners who manage affairs
of the partnerships and upon the underlying activities of the
partnerships. See Hill v. Commissioner, 204 F.3d 1214 (9th Cir.
2000); Thomas v. United States, 166 F.3d 825, 832-834 (6th Cir.
1999); Drobny v. Commissioner, 86 T.C. at 1341 (citing Brannen v.
Commissioner, 78 T.C. at 504-505); Fox v. Commissioner, 80 T.C.
972, 1007-1008 (1983), affd. without published opinion 742 F.2d
1441 (2d Cir. 1984), affd. sub nom. Barnard v. Commissioner, 731
F.2d 230 (4th Cir. 1984), affd. without published opinions sub
nom. Hook v. Commissioner, Kratsa v. Commissioner, Leffel v.
Commissioner, Rosenblatt v. Commissioner, Zemel v. Commissioner,
734 F.2d 5, 6-7, 9 (3d Cir. 1984).
Under any other approach, different results would accrue to
partners in the same partnerships even though the partners
themselves may have had no control over activities of the
partnerships. See Independent Elec. Supply, Inc. v.
Commissioner, 781 F.2d 724, 729 (9th Cir. 1986), affg. Lahr v.
Commissioner, T.C. Memo. 1984-472; Resnik v. Commissioner, 66
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