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investment transactions. The investment risk for petitioner, his
brother, and Oldach, through Centre, JCLC, and Colorado
Structures, focused on Triview’s potential success in developing
infrastructure for the Triview district; taxing and assessing
fees as a result of the development activity; and repaying the
bonds it issued, including interest. Triview was independent in
its control and management, and the risk of loss on the bonds
purchased by Centre and Colorado Structures was the same as that
of any other uninterested investor. The risk included
mismanagement of finances and operations, which given Triview’s
previous insolvency, may have been substantial. We conclude that
Triview’s development activities were not made on behalf of or
for the direct benefit of JCLC.
Respondent next argues that the 1998 sale of parcels by JCLC
to Vision was done solely for tax avoidance and had no
independent business purpose. In that regard, respondent asserts
that the development activities performed by Vision should be
attributed to JCLC, resulting in JCLC’s holding the property for
sale in the ordinary course of business.
In Bramblett v. Commissioner, 960 F.2d 526, 528 (5th Cir.
1992), revg. T.C. Memo. 1990-296, the Court of Appeals for the
Fifth Circuit analyzed a similar factual situation to the one we
consider here. In that case, the taxpayer was a partner in a
partnership formed to acquire land for investment purposes. The
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