-15-
Subs. v. Commissioner, 101 T.C. 294, 299 n.7 (1993). Section
6501(e)(1)(A)(i) provides a special definition of gross income in
the context of a trade or business. That section provides that
as applied to a trade or business, “gross income” includes the
total of the amounts received or accrued from the sale of goods
or services before diminution by the cost of those sales or
services. Sec. 6501(e)(1)(A)(i). With regard to a taxpayer-
partner, we have interpreted this provision as requiring that a
taxpayer’s gross income include her share of the partnership’s
gross receipts from the sale of goods or services. Harlan v.
Commissioner, 116 T.C. 31 (2001); Estate of Klein v.
Commissioner, 63 T.C. 585, 591 n.6 (1975), affd. 537 F.2d 701
(2d Cir. 1976). In essence, the taxpayer-partner’s share of the
partnership’s gross receipts is used in determining total gross
income of the taxpayer, the denominator in our calculation.
Here, respondent argues that petitioners’ interests in the
six partnerships do not implicate section 6501(e)(1)(A)(i).
According to respondent, if the partner did not actively
participate in the partnership, the partner is not engaged in a
trade or business, and the “gross receipts” definition of section
6501(e)(1)(A)(i) is not implicated. Thus, respondent contends,
the general meaning of gross income should apply, and only the
taxpayer-partner’s share of income from the partnership that was
already included in the taxpayer-partner’s return is included in
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