George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 19

                                                 - 19 -                                                    
            I.  Kolonaki                                                                                   
                  Kolonaki asserts that it was the beneficial owner of JAI                                 
            stock and was entitled to deduct a $1,580,458 net loss from JAI                                
            on its 1990 Form 1120 tax return.  Respondent contends that                                    
            Kolonaki was not the beneficial owner of JAI stock and,                                        
            therefore, not entitled to include JAI on its consolidated                                     
            return.  Respondent acknowledges that beneficial ownership would                               
            satisfy the ownership requirement of section 1504(a).  Respondent                              
            argues, however, that there was no credible documentation to                                   
            substantiate Kolonaki's beneficial ownership of JAI, only                                      
            documents that were created or altered and backdated after the                                 
            audits began.                                                                                  
                  Kolonaki's right to file a consolidated return depends on                                
            whether, during the year in issue, Kolonaki "owned directly",                                  
            within the meaning of section 1504, at least 80 percent of the                                 
            voting power of all classes of JAI stock.  Under section 1501, an                              
            affiliated group has the privilege of making a consolidated                                    
            return.  An affiliated group is defined in section 1504(a) as                                  
                         (a) Affiliated Group Defined.--For purposes of                                    
                  this subtitle--                                                                          
                               (1) In general.--The term "affiliated group"                                
                                     (A) 1 or more chains of includible                                    
                               corporations connected through stock                                        
                               ownership with a common parent corporation                                  

Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011