Section 2

Citation: Section 2
Parent Document: United Housing Foundation, Inc. v. Forman, 421 U.S. 837 (1975)
Jurisdiction: United States (federal)
Effective Date: 1975-10-06
Original Source: https://www.courtlistener.com/opinion/109272/united-housing-foundation-inc-v-forman/ ↗

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In SEC v. C. M. Joiner Leasing Corp., 320 U. S. 344 (1943), the investment was in oil leases. In Howey it involved citrus groves. Though taxation was not a factor in the Court's disposition of those cases, each of those investments was of a type offering tax advantages as a principal attraction to the investor. Cunnane, Tax Shelter Investments After the 1969 Tax Reform Act, 49 Taxes 450 (1971). It is no answer that the individual investor could have obtained the same tax advantages by purchasing an entire citrus business or by becoming an independent oil operator. He could, but if he did his profits from tax advantages would not then "come solely from the efforts of others." It is only when he relies on third parties to produce the profits for him that, as here, the question of investment contract analysis arises.

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