Court Opinion

ID: 4476009
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:48.072211+00
Date Added: 2024-06-11T14:53:53.852695
License: Public Domain

Ofpek, /., dissenting: By definition the aspect of services has been eliminated in this case from the series of tests described in Culbertson1 That is because a limited partner is involved only to the extent of the property committed to the venture. Theodore D. Stern, 15 T. C. 521. But if we are to look only to the property we should, it seems to me, at least be satisfied that the usual attributes of ownership inhere in its putative owner. Cf. Helvering v. Clifford, 309 U. S. 331. Here the trust was compelled to use the alleged gift to acquire an “interest” in the business; had no control of the property; could not sell or dispose of it; could not freely withdraw profits; was confined to its investment in the partnership business; and compelled to retain that investment unless the will of the general partners, including petitioner, permitted otherwise. As we said in Ralph C. Hitchcock, 12 T. C. 22, 30, 31: “These documents, taken in their entirety, negative any suggestion that the petitioner, as donor, intended to absolutely and irrevocably divest himself of the dominion and control of the subject matter of his purported gifts. * * * This is not a case where the children were at liberty at any time to withdraw or assign their interests in the business or where they possessed an unqualified right to receive their full share of each year’s earnings.” This can scarcely be termed true ownership and eliminates the only basis on which the trust’s participation in the partnership can be justified under the Culbertson tests. We have never gone so far, even in the Stern case, and I think we should not do so now. See Losh v. Commissioner (C. A. 10), 145 F. 2d 456; Feldman v. Commissioner (C. A. 4), 186 F. 2d 87. Hill, Harron, LeMire, and Baum, JJ., agree with this dissent.   “ * * * The question is * * * -whether, considering all the facts — the agreement, the conduct of the parties in execution of its provisions, their statements, the testimony of disinterested persons, the relationship of the parties, their respective abilities and capital contributions, the actual control of income and the purposes for which it is used, and any other facts throwing light on their true intent — the parties in good faith and acting with a business purpose intended to join together in the present conduct of the enterprise. * * *” Commissioner v. Culbertson, 337 U. S. 733, 742.