- 18 - 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. ThePage: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Next
Last modified: May 25, 2011