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were not engaged in a partnership with respect to the Angel-Royse
Property.
A partnership is an organization for the production of
income to which each partner contributes one or both of the
ingredients of income, capital, or services. Commissioner v.
Culbertson, 337 U.S. 733, 740 (1949). In determining whether
there is a partnership, we consider the following factors:
The agreement of the parties and their conduct in
executing its terms; the contributions, if any, which
each party has made to the venture; the parties'
control over income and capital and the right of each
to make withdrawals; whether each party was a principal
and coproprietor, sharing a mutual proprietary interest
in the net profits and having an obligation to share
losses, or whether one party was the agent or employee
of the other, receiving for his services contingent
compensation in the form of a percentage of income;
whether business was conducted in the joint names of
the parties; whether the parties filed Federal
partnership returns or otherwise represented to
respondent or to persons with whom they dealt that they
were joint venturers; whether separate books of account
were maintained for the venture; and whether the
parties exercised mutual control over and assumed
mutual responsibilities for the enterprise. [Luna v.
Commissioner, 42 T.C. 1067, 1077-1078 (1964).]
In order for there to exist a partnership, the parties must
conduct some business activity. Madison Gas & Elec. Co. v.
44(...continued)
I trust you will recall that Walter and Roger discussed
with you and I a settlement of the existing dispute
over the Royse-Angell property by an even exchange of
Walter’s interest in the Arrowhead Lakes property for
Roger’s interest in the Royse-Angell property. Walter
apparently feels that he can salvage the Angell-Royse
property and has directed me to proceed with the
proposed settlement. * * *
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