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be determined in accordance with the partner's
interest in the partnership (determined by taking
into account all facts and circumstances), if-–
(1) the partnership agreement does not
provide as to the partner's distributive
share of income, gain, loss, deduction, or
credit (or item thereof), or
(2) the allocation to a partner under
the agreement of income, gain, loss,
deduction or credit (or item thereof), does
not have substantial economic effect.
None of the parties to the instant cases claims that
there is a partnership agreement under which either part-
ner's distributive share of income, gain, loss, deduction,
or credit can be determined, as provided by section 704(a).
This is consistent with the fact that James and Darwin did
not enter into a written partnership agreement and the fact
that their oral agreement was merely an informal, general
agreement to operate an animal farm and did not contain any
specific terms.
Because there is no partnership agreement in these
cases, there is no need to address the estate's "alterna-
tive" argument that a 50-50 allocation of partnership
income has substantial economic effect. See Brooks v.
Commissioner, T.C. Memo. 1995-400; Mammoth Lakes Project
v. Commissioner, T.C. Memo. 1991-4.
All of the parties to the instant cases take the
position that the subject income must be allocated in
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