- 23 -
Commissioner, supra at 193; PNRC Ltd. Partnership v.
Commissioner, T.C. Memo. 1993-335.
The first factor, the partners' relative capital
contributions, was discussed in the 1997 State court
opinion. The State court found that James' capital
contributions totaled $1,001,568.60 and Darwin's
contributions totaled $2,320. The parties to the instant
cases do not challenge the findings of the State court
regarding the capital contributions of each partner.
The 1997 State court opinion does not set forth the
dates on which James made his contributions, but from our
review of the 1992 and 1997 State court opinions, we
conclude that a substantial percentage of James'
contributions, at least $700,000, was made before the years
in issue. According to the 1997 State court opinion, all
of Darwin's contributions, in the aggregate amount of
$2,320, were made before the years in issue.
The second factor to consider in determining a
partner's interest in the partnership is the partner's
interest in economic profits and losses. The 1992 State
court opinion states that the partners would share the
profits of the business after they were repaid their
capital contributions.
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