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seeking a deduction only for their out-of-pocket cash invested in
the partnerships.
The Garfield and Cardinal limited partnerships did not
constitute mere passive coowners of property. These limited
partnerships entered into transactions, formed joint ventures,
operated gas wells, and engaged in various other activities.
They carried on a financial operation or venture. They are to be
treated as partnerships under section 76l(a) even though the
underlying activities of the partnerships lacked a profit
objective under section 183. The Garfield and Cardinal limited
partnerships each had the formal indicia of partnership status
and conducted themselves generally as partnerships. They are to
be treated as partnerships.
The issue herein under section 183 as to profit objective is
to be analyzed at the partnership level. The parties’
stipulation that activities and transactions of the Garfield and
Cardinal limited partnerships were not entered into with a profit
objective does not affect the status of the partnerships as
partnerships for Federal income tax purposes.
Section 6621(c) Increased Interest
With regard to increased interest under section 6621(c),
among other arguments, petitioners contend that the temporary
regulations under section 6621 that extended increased interest
to transactions lacking a profit objective are invalid and that
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