- 6 -
T.C. 74, 81 (1976), affd. per curiam 555 F.2d 634 (7th Cir.
1977). For these reasons, in analyzing the economic substance
and the profit objective of limited partnership investments, in
particular, individual actions of limited partners are not the
focus of the analysis.
An analysis of the economic substance and the profit
objective element at the partnership level under section 183 is
consistent with and follows the general rule of Federal
partnership taxation that the treatment of partnership income,
loss, deduction, or credit items is to be determined at the
partnership level. See sec. 702(b); Podell v. Commissioner, 55
T.C. 429, 433 (1970) (citing Estate of Freeland v. Commissioner,
393 F.2d 573 (9th Cir. 1968), affg. T.C. Memo. 1966-283); sec.
1.702-1(b), Income Tax Regs.
Section 761(a) defines a partnership for Federal income tax
purposes essentially as a group, joint venture, or other
unincorporated organization through which any business, financial
operation, or venture is carried on. See also section 7701(a)(2)
and section 1.761-1(a), Income Tax Regs., under which the term
“partnership” is defined more broadly than the common-law meaning
of partnership.
We discern no reason to deviate from the above partnership-
level approach merely because petitioners herein have conceded
the originally claimed partnership tax benefits and are now
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011