-322-
a partnership for the years in question, the partnership was
limited to Kanter and Weisgal, and, therefore, Kanter is taxable
on a one-half distributive share of Century Industries’ income.
Petitioners aver that Century Industries earned the fees in
question as compensation for evaluating whether it would make
certain investments. There is no direct evidence to support this
assertion. To the contrary, the objective evidence of record
demonstrates that the fees paid to Century Industries represented
compensation to Kanter and Weisgal for services they provided to
the payors, and those services were unrelated to any potential
investment by Century Industries. For example, a September 12,
1984, letter from Century Industries to Satcorp stated (1) Kanter
and Weisgal would serve as so-called financial engineers for
Satcorp and Kanter and Weisgal would be principally involved in
planning and structuring transactions for financing for Satcorp,
its operating companies, and its future projects, and (2) Century
Industries would consider participating in the actual process of
obtaining financing, but it “will not be routinely responsible
for any such activities.” Similarly, letters from Weisgal to C&S
in late 1984 revealed that Century Industries billed C&S for
services provided by Kanter and Weisgal including financial
planning, consideration of leverage debt financing, consideration
and evaluation of debt financing coupled with additional equity,
review and identification of sources of bank financing,
Page: Previous 312 313 314 315 316 317 318 319 320 321 322 323 324 325 326 327 328 329 330 331 NextLast modified: May 25, 2011