- 11 - the determination, we generally look to the actions and expertise of the promoters and the general partner of the partnership. Peat Oil & Gas Associates v. Commissioner, 100 T.C. 271, 276 (1993); Hulter v. Commissioner, supra at 393; Fox v. Commissioner, 80 T.C. 972, 1007-1008 (1983), affd. without published opinion 742 F.2d 1441 (2d Cir. 1984); Gianaris v. Commissioner, supra. As explained below, there are several reasons to support our holding that the EMS-related activity was not engaged in with a dominant or primary objective of making a profit. These include: (1) The grossly inflated sale price of the EMS; (2) the lack of profit objective reflected by the actions and lack of expertise of the promoters and general partner of Sav-Fuel; and (3) the lack of a profit objective under the factors contained in section 1.183(a)-2, Income Tax Regs. Additionally, applying the approach used in Gianaris v. Commissioner, supra, we find that there was no reasonable possibility of a profit independent of tax considerations because the discounted cashflows (disregarding tax considerations) would have been negative. We explain our findings in detail below. A. Sale Price of EMS A hallmark of an economically distorted tax shelter is a purported transfer of ownership at a grossly inflated sale price. Soriano v. Commissioner, 90 T.C. 44, 54 (1988). Generally, thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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