The gifts were never claimed to be invalid and were never rescinded, by petitioner, but they were not recognized by the Commissioner as constituting the donees members of a partnership for income tax purposes, and petitioner was held liable for income tax on the income attributable in 1941 to each of the 5 per cent partnership interests in Camiel Thorrez, 5 T.C. 60,affd. 155 F.2d 791.
This difference, as the petitioner argues, is not without significance, since the decisions in the Tower and Lusthaus cases were based to a considerable extent upon the fact that the husband really earned the income through the services which he performed during the taxable year. See, however, Camiel Thorrez, 5 T.C. 60; affd., 155 Fed.(2d) 791, in which two of the partners were described as inactive, and Robert E. Werner, 7 T.C. 39, in which the petitioner gave his wife a business somewhat separate from his own. The Supreme Court said in the Tower case that ‘a partnership is generally said to be created when persons join together their money, goods, labor, or skill for the purpose of carrying on a trade, profession, or business and when there is community of interest in the profits and losses.
Many cases have been decided recently involving claimed family partnerships. (See, e.g., the majority, concurring, and dissenting opinions in Camiel Thorrez, 5 T.C. 60; Jacob DeKorse, 5 T.C. 94; Hodgson v. Willingham,—Fed.Supp.— (May 17, 1945). Cf. Lusthaus v. Commissioner, 149 Fed.(2d) 232; M. M. Argo, 3 T.C. 1120; affd., 150 Fed.(2d) 67 (C.C.A., 5th Cir.); and Tower v. Commissioner, 148 Fed.(2d) 388. Petitioner cites some earlier cases which support his contention that the income was correctly reported by him and his relatives.