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On brief, petitioner implies that the relevant inquiry is
whether he had the requisite profit objective. As explained
earlier, in the partnership context, the determination of profit
objective is made at the partnership level. Cannon v.
Commissioner, 949 F.2d at 349; Hulter v. Commissioner, 91 T.C. at
393; Brannen v. Commissioner, 78 T.C. at 505. However, the
result would be the same even if the profit objective was
examined from petitioner’s standpoint. The evidence in the
record reflects that petitioner, an experienced investor, did not
take the time to do an independent investigation of the
assumptions contained in the PPM or otherwise take any action to
verify the profitability of the EMS-related activity. The
parties stipulated that at the time of his investment in Sav-
Fuel, petitioner had no knowledge of the partnership other than
the information he obtained from review of the PPM. At trial,
petitioner admitted that he did not perform an independent
valuation analysis of the EMS until after he learned that
respondent had disallowed his claimed deductions. On the basis
of petitioner’s failure to undertake these steps, we find it
implausible that he had the dominant or primary objective of
making a profit.
D. Present Value Analysis
Although we have already found that Sav-Fuel was not engaged
in the EMS-related activity for profit and therefore petitioner
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