- 19 -- 19 -
test applies. Carver v. United States, supra. A corporation's
tax identity is rarely ignored unless it is a sham. Bennett
Paper Corp. v. Commissioner, 699 F.2d 450, 452 (8th Cir. 1983),
affg. 78 T.C. 458 (1982); Crouch v. United States, 692 F.2d 97,
99-100 (10th Cir. 1982); Strong v. Commissioner, 66 T.C. 12, 22
(1976), affd. without published opinion 553 F.2d 94 (2d Cir.
1977). The lack of compliance with formalities of State laws
does not affect whether the corporation is disregarded under
Moline Properties. United States v. Creel, 711 F.2d 575, 579-580
(5th Cir. 1983); Evans v. Commissioner, 557 F.2d 1095 (5th Cir.
1977), affg. in part and revg. in part T.C. Memo. 1974-267.
1. Whether Rosewood Kennels, Inc., Engaged in Business
Petitioners contend that we should disregard the
incorporation of Rosewood Kennels, Inc. We disagree because,
under the second part of the Moline Properties test, we do not
disregard the incorporation of an entity if it actually engaged
in business. Moline Properties, Inc. v. Commissioner, supra;
Carver v. United States, 188 Ct. Cl. 202, 412 F.2d 233 (1969).
Only a minimal amount of business activity is required to
meet the second part of the Moline Properties test. Britt v.
United States, 431 F.2d 227, 235 (5th Cir. 1970); Paymer v.
Commissioner, 150 F.2d 334, 336-337 (2d Cir. 1945) (corporation
recognized because it borrowed $50,000); Hospital Corp. of Am. v.
Commissioner, 81 T.C. 520, 579-580 (1983); Strong v.
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