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businesses, and reselling the businesses for a quick profit.
Although petitioner's experience with turning around troubled
companies is not so extensive and continuous as to establish that
he was engaged in a trade or business, he does have some history
of rehabilitating financially troubled businesses beginning in
1960.
Accordingly, we find that there is a reasonable basis for
petitioner to have claimed that he acquired his interests in the
BEI subsidiaries as inventory and not merely as investments.
Ms. Carvin argues that even if a trade or business of buying
and selling business enterprises did exist, the activity is that
of BEI and not petitioner individually. The bad debt deduction
was based on advances made to BEI, a corporation that petitioner
wholly owned, and TELCOR, a 90-percent subsidiary of BEI. In
general, a taxpayer cannot treat the business activity of a
wholly owned corporation as his own trade or business for
purposes of section 166. Vreeland v. Commissioner, 31 T.C. 78
(1958). A shareholder is not engaged in the trade or business in
which the corporation is engaged unless the shareholder engages
in such trade or business apart from affiliation with the
corporation. See Smith v Commissioner, T.C. Memo. 1994-640.
Petitioner organized BEI to conduct his business ventures in
corporate form. Petitioner was the sole shareholder of BEI and
the chairman of BEI's four-member board of directors. For the
advances to be deductible by petitioners as business bad debt, we
would need to ignore BEI's corporate form and attribute the
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