(concurring and dissenting):

I concur in part II of Judge Browning’s “per curiam” opinion. I dissent from part I.

In my opinion, the tax court, in its Memorandum Decision, Tax Ct.Mem.Dec. (P-H) ¶ 81,594 (1981), correctly held that Jackson received a capital gain in his convoluted dealings between himself and his wholly-owned corporation, HSI.

As the tax court saw it, the joint venture became liable to Jackson in an amount equal to the loans Jackson received and passed on as contributions to the venture. There is ample evidence to support the conclusion that the venture intended to assume such an obligation, even if it was not to become primarily liable to Wells Fargo or Gibraltar. For example, the joint venture agreement states, in § 1.17, that it is understood that the venture will repay the loan from Wells Fargo; that loan is reflected as a liability on the venture’s 1972 tax return; and the venture actually repaid the loan in 1973. The venture agreement similarly stated that the Gibraltar loan was on behalf of the venture.

The finding by the tax court that the venture, through collateral agreements, agreed to repay the loan amounts, is not clearly erroneous. And because the venture had agreed to repay the loan amounts, Jackson was obligated by his status as a partner in the venture. This obligation is separate from his obligation to Wells Fargo and to Gibraltar; it is an obligation as a partner to repay the contributors to capital, i.e., to repay himself, HSI, and LEI.

It follows that if HSI assumed this share of Jackson's partnership liabilities, he received a benefit. Thus, although he was not relieved from his primary and secondary obligations to Wells Fargo and Gibraltar — only the banks could do that — he was relieved from his obligation as a partner under the venture’s collateral agreement to fund the loan repayments.

I would affirm the entire judgment of the tax court.