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the parties to disregard the royalty agreement and ECI for the
purposes of this case.
Issue 1. Whether Petitioner and Crocus Were Engaged in a Joint
Venture or Joint Ventures To Conduct Foreign Trade Shows During
January 1, 1995 to July 31, 1996
Whether there is a partnership for tax purposes is a matter
of Federal, not local, law.19 Commissioner v. Tower, 327 U.S.
280, 287-288, (1946); Estate of Kahn v. Commissioner, 499 F.2d
1186, 1188 (2d Cir. 1974), affg. Grober v. Commissioner, T.C.
Memo. 1972-240; Beck Chem. Equip. Corp. v. Commissioner, 27 T.C.
840, 849 (1957). “[T]he term ‘partnership’ includes a syndicate,
group, pool, joint venture, or other unincorporated organization
through or by means of which any business, financial operation,
or venture is carried on, and which is not * * * a corporation or
a trust or estate.” Secs. 761(a), 7701(a)(2). The principles
used to determine whether there is a partnership for Federal tax
purposes are equally applicable to determine whether there is a
joint venture for Federal tax purposes. Sierra Club, Inc. v.
Commissioner, 103 T.C. 307, 323 (1994), affd. in part and revd.
in part on other grounds 86 F.3d 1526 (9th Cir. 1996); Luna v.
19Neither petitioner nor respondent has addressed whether
petitioner and Crocus engaged in a partnership or joint venture
under Russian law. Because the record provides no information or
evidence with respect to the subject of partnerships or joint
ventures under Russian law, we apply U.S. tax law to determine
whether petitioner and Crocus conducted foreign trade shows as a
joint venture.
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