-17-
105 F.3d 482 (9th Cir. 1997); Butler v. Commissioner, 36 T.C.
1097 (1961). Additionally, an individual taxpayer may be engaged
in more than one trade or business. Oliver v. Commissioner,
138 F.2d 910 (4th Cir. 1943), affg. a Memorandum Opinion of this
Court.
Respondent argues that we should not impute the trade or
business of a partnership to a partner, limited or general, who
does not actively or materially participate in a partnership.
Essentially, respondent suggests, section 6501(e)(1)(A)(i) does
not include those activities that qualify as “passive activities”
under section 469(c). Respondent has provided no support for
this argument, other than his view that a partner who does not
materially participate in a partnership is simply an investor.
We see no reason to so limit the application of section
6501(e)(1)(A)(i). That provision of the Code does not indicate
that a partner must materially or actively participate in the
trade or business. In fact, respondent has conceded that the
partnerships are engaged in trade or business activities. We
hold that section 6501(e)(1)(A)(i) does not require that a
partner materially participate, as defined by section 469, in the
trade or business activity.
The gross receipts definition of gross income provided in
section 6501(e)(1)(A)(i) is implicated, and petitioners’ gross
income for purposes of that provision includes their share of the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011