- 17 -
or business of the corporation. We are convinced, and find, that
the corporation was engaged in no trade or business during 1988.
Likewise, we are convinced, and find, that the corporation was
engaged in no trade or business during either 1989 or 1990. We
have found that the corporation sold no merchandise in either
1989 or 1990. Petitioners argue that:
In 1989 and 1990, * * * [petitioner] refocused Scott's
Limo's car exhibition activities on becoming a fixed-
site exhibitor of its exotic cars at his planned exotic
car entertainment complex. Likewise, * * * [the
corporation] refocused its activities during these
years in an effort to continue to compliment [sic]
Scott's Limo's new-found market as the lead exhibitor
at the entertainment complex. * * *
The corporation was to play some role with regard to Scott's
Limo's expansion plans. Whatever that role was, the exotic car
entertainment complex did not open in 1989 or 1990, and the
corporation had not commenced business activities in support
thereof during 1989 and 1990. The corporation's expenditures
during 1989 and 1990 were nondeductible preopening expenses.
Accordingly, we sustain respondent's disallowance of the losses
passed through from the corporation to petitioner.
IV. Additions to Tax
A. Section 6661
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