- 22 -
Commissioner, 55 T.C. 866, 874 (1971), affd. 457 F.2d 1165 (5th
Cir. 1972)), affd. without published opinion 652 F.2d 65 (9th
Cir. 1981).
Kolonaki relies primarily on Georgiou's assertion that
Georgiou, as Kolonaki's sole shareholder, always intended
Kolonaki to be the beneficial owner of the JAI stock. Kolonaki's
reliance on Georgiou's subjective intent is misplaced. A
corporation and its sole shareholder are separate legal entities
if a business purpose exists for the corporation. Moline
Properties v. Commissioner, 319 U.S. 436, 438-439 (1943).
The doctrine of corporate entity fills a useful
purpose in business life. Whether the purpose be to
gain an advantage under the law of the state of
incorporation or to avoid or to comply with the demands
of creditors or to serve the creator's personal or
undisclosed convenience, so long as that purpose is the
equivalent of business activity or is followed by the
carrying on of business by the corporation, the
corporation remains a separate taxable entity. * * *
[Id.; fn. ref. omitted.]
The degree of corporate purpose and activity requiring
recognition of the corporation as a separate business entity is
extremely low. Strong v. Commissioner, 66 T.C. 12, 24 (1976),
affd. without published opinion 553 F.2d 94 (2d Cir. 1977).
Kolonaki carried on business activity. It entered into
contracts, such as the Supply Agreement with Alexia. Kolonaki
owned the GRS stock and filed its own corporate tax returns.
Kolonaki's business activities, separate from Georgiou's personal
affairs, are sufficient evidence of Kolonaki's status as a
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