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stated that one of the critical elements in determining whether a
lease is actually a joint venture is whether there is “a risk of
loss in the taxpayer.” In that case, the taxpayer’s rent
payments were directly tied to the profits of the business, but
because he was not required to contribute to any losses, he had
no risk of loss and therefore was not involved in a joint
venture. Id. By this standard, Monk looks even less like a
partner: not only is he not required to contribute to any losses
sustained by Chuck’s Place, but he receives gross rent in the
same amount each month regardless of what those profits might
be.8
In fact, the only evidence that weighs in favor of calling
Chuck’s Place a joint venture, instead of calling it a business
owned by Maney that pays rent to Monk, is Monk’s history of
listing himself as the bar’s owner on his original tax returns
and putting his own name on the state licensing applications and
other paperwork. But we look at these facts in the context of
their old friendship. Seen that way, this evidence looks more
like one friend trying to help another who made a mistake a long,
8 Maney also testified that he (and not Monk) has the bar’s
logo tattooed on his chest. Though the Court did not undertake a
visual inspection, we found him credible on this point. His
numerous expressions of pride in the bar and its role in the
neighborhood--and the fact that it is named “Chuck’s Place” and
not, say, “Famous Ray’s”--are additional, albeit minor, factors
supporting our conclusion that the bar is his.
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Last modified: March 27, 2008