¹See 1933 Act Rule 501(a)(6).

²See 15 USC Section 80a-3(c)(1) and -3(c)(7).

³A fourth type of hedge-fund partnership is a fund of funds, a hedge fund that primarily invests in other hedge funds (although such entities mayand often doalso invest in securities directly). The tax status of a fund of funds is usually determined by the status of the funds in which it invests. If the underlying funds are deemed investor partnerships, the fund of funds will be an investor partnership; if the underlying funds are trader partnerships, the fund of funds will be a trader partnership.

⁴For a detailed analysis of the factors used to determine whether a taxpayer is an investor or trader, see Robert P. Groetzinger, 480 US 23 (1987); Frederick R. Mayer, 32 Fed. Cl. 149 (1994); Joseph A. Moller, 721 F2d 810 (Fed. Cir. 1983), cert. den.; Stephen Marrin, TC Memo 1997-24, affd, 147 F3d 147 (2d Cir. 1998); Leonhard F. Fuld, 139 F2d 465 (2d Cir. 1943); Fernand C. A. Adda, 10 TC 273 (1948), affd per curiam, 171 F2d 457 (4th Cir. 1948), cert. den.; and Chang H. Liang, 23 TC 1040 (1955); see also Shapiro, Private Securities PartnershipsThe Trade or Business Issue Examined, 56 Tax Notes 85 (1992).

⁵See the Example at Temp. Regs. Sec. 1.469-1T(e)(6)(iii).

⁶According to Marie Hanlin, 38 BTA 811 (1938), affd, 108 F2d 429 (3d Cir. 1939), [s]ubstantially identical imports approximation to identity, not mere similaritymeans in the main. It imports something less than precise correspondence; its economic correspondence exclusive of differentiations so slight as to be unreflected in the acquisitive and proprietary habits of holders of stocks and securities.

⁷See NYC Administrative Code Section 11-503(a).

⁸See, e.g., NYC Administrative Code Section 11-502(c)(4).