Lucian T. Baldwin, III - Page 52




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          revg. in part T.C. Memo. 1986-569, for the proposition that the             
          “entire economic relationship” of related companies must be                 
          analyzed when making a determination regarding profit motivation.           
          Petitioner also relies upon several cases holding that the                  
          taxpayer had a bona fide profit motive in what he contends are              
          similar situations.  See, e.g., Cornfeld v. Commissioner, 797               
          F.2d 1049 (D.C. Cir. 1986); Horner v. Commissioner, 35 T.C. 231             
          (1960); Kuhn v. Commissioner, T.C. Memo. 1992-460; Lee v.                   
          Commissioner, T.C. Memo. 1986-294; Louismet v. Commissioner, T.C.           
          Memo. 1982-294.                                                             
               The cases cited by petitioner are readily distinguishable              
          because none of the cases involved an alleged business activity             
          conducted primarily for the personal benefit of the owner.  For             
          example, in Campbell v. Commissioner, supra, the Court of Appeals           
          for the Sixth Circuit held that a taxpayer could deduct losses              
          from a partnership where the partnership’s only business purpose            
          was to lease an airplane to a corporation controlled by the                 
          partners of the partnership.  The corporation’s employees and               
          officers engaged in extensive air travel in furtherance of the              
          corporation’s business and used the partnership’s airplane to               
          facilitate that travel.  Despite repeated losses in the                     
          partnership, the Court of Appeals found a profit motive by                  
          considering the overall increase in wealth of the partners                  
          through the corporation, accomplished through the use of                    







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