Peter M. and Susan L. Hoffman - Page 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            
               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           

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