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interest. Accordingly, his distributive share of the
partnership's trade or business income is, subject to the
limitations of section 1402(b), subject to the taxes imposed by
section 1401 on self-employment income. Cokes v. Commissioner,
91 T.C. 222, 229-230 (1988); Anderson v. Commissioner, T.C. Memo.
1992-130. That petitioner spent a minimal amount of time engaged
in the operations of Gallant is irrelevant to this determination.
Cokes v. Commissioner, supra at 233; Anderson v. Commissioner,
supra. The passive activity rules under section 469 have no
application in this case. Petitioner's lack of participation in
or control over the operations of Gallant does not turn his
general partnership interest into a limited partnership interest.
A limited partnership must be created in the form prescribed by
State law. Perry v. Commissioner, T.C. Memo. 1994-215; Johnson
v. Commissioner, T.C. Memo. 1990-461.
Accordingly, we find for respondent on this issue.
Decision will be entered
for respondent.
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Last modified: May 25, 2011