Washington Law Review


Roy J. Moceri


A, B and C, brothers, having for years operated their business as a general partnership and later as a corporation, formed a limited partnership under the Washington Limited Partnership Act of 1869, RCW 25.12.010 et seq. [RRS § 9966 et seq.], with themselves as general partners and their ten adult children as the limited partners. The articles of co-partnership provided: the management was to be vested in the general partners; upon the death or retirement of a general or limited partner, the remaining general partners were to have the right to continue the business; the interest of a limited partner was to be transferable only with the approval of the general partners; and the general partners were to have the right to admit additional limited partners upon the same footing as the original ones. The Commissioner of Internal Revenue contended that the enterprise constituted an "association" within the meaning of the Internal Revenue Code and was therefore taxable as a corporation. Held: Petitioner does not bear such a resemblance to an association or operate effectively as such to justify inclusion of it in that category for tax purposes. Western Construction Co. v. CIR, 14 T. C. 453, Non-acquiesced, 1950-2 Cum. Bull. 6, aff'd without opinion. 191 F. 2d 401 (C.C.A. 9th 1951).

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