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There is no evidence in the record, not even petitioner’s
testimony, that he intended to engage in a business of his own
with the developed technology. “The fact that a taxpayer may
have taken an active role in directing the research does not, by
itself, place a taxpayer in a trade or business.” I-Tech R&D
Ltd. Pship. v. Commissioner, T.C. Memo. 2001-10 (citing Green v.
Commissioner, 83 T.C. at 690). There is no evidence in the
record of any specific plans or forecasts relating to the
probability that petitioner might engage in the marketing of the
developed technology. Id. There is no evidence that petitioner
actually marketed the developed technology. Indeed, it would
have been counterintuitive for petitioner to market the developed
technology to outsiders; CPSG, Inc. was already an established
software marketing entity with existing customers. All the
publications and marketing materials relating to the developed
technology were created on behalf of CPSG, Inc., not petitioner.
If petitioner himself marketed the developed technology, he would
be competing with his solely owned corporation. Indeed on brief,
petitioners argued “CPSG was in absolutely the best position in
the universe to market the * * * [Developed Technology]. Not
only was it reasonable for petitioner to attempt to use CPSG to
market the new products, it would have been asinine for him not
to have done so.”
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