-350-
permitted THC to invest in his share of the CMS Investors
offering. Kanter, Transcr. at 4198-4199.
Delta Partnership (Delta) was formed on the same date that
CMS Investors was formed and CMS Investors acquired a 95.5-
percent partnership interest in Delta. Exh. 9135. Alpha
Partnership (Alpha) was formed in May 1979, and CMS Investors
acquired an 85.5-percent partnership interest in Alpha. Exh.
9136.
In 1978, Delta made a substantial loan to another
partnership, Shelburne Associates (Shelburne), which the latter
used to purchase several feature-length motion pictures. Exh.
9137. In 1979, Alpha made a substantial loan to another
partnership, Century Associates (Century), which the latter used
to purchase several feature-length motion pictures. Exh. 9138.
Respondent concedes Shelburne and Century both paid
substantial legal fees to the Levenfeld/Kanter law firm.
Respondent’s Opening Brief at 920, par. 1382.
Shelburne and Century subsequently transferred to Delta and
Alpha substantial amounts, characterized as bonus payments, and
CMS Investors received distributable shares of these bonus
payments as a partner in Delta and Alpha. THC, a CMS Investors
partner, in turn received its distributable share of the bonus
payments. THC reported these payments as income on its income
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