George Georgiou and Judith Georgiou A.K.A. Judy Georgiou, et al. - Page 22

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            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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