Cane Creek Sportsman's Club, Inc. - Page 8

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               Only a minimal amount of business activity is required to              
          meet the second prong of the Moline Properties, Inc. test.  See             
          Britt v. United States, 431 F.2d 227, 237 (5th Cir. 1970);                  
          Tomlinson v. Miles, 316 F.2d 710, 714 (5th Cir. 1963).  We                  
          believe that the formation of petitioner was followed by business           
          activity in the ordinary meaning.  See National Investors Corp.             
          v. Hoey, 144 F.2d 466, 468 (2d Cir. 1944).  Petitioner's activity           
          began with the adoption of bylaws, the election of officers and             
          directors, and the issuance of stock.  It included petitioner's             
          buying and selling the property in question, securing an employer           
          identification number, filing corporate Federal income tax                  
          returns, taking depreciation deductions on the hunting lodge, and           
          reporting net income.  Indeed, for most of the years in which               
          petitioner filed Federal income tax returns, it reported having             
          income.3  Under these circumstances, we find that petitioner was            
          active enough to justify holding that it did engage in business.            
          The absence of books and a bank account, and the failure to hold            
          corporate meetings are not decisive on that question.  See Paymer           
          v. Commissioner, 150 F.2d 334, 336 (2d Cir. 1945), affg. in part            
          and revg. in part a Memorandum Opinion of this Court dated Jan.             
          2, 1943.  The decision to recognize or not to recognize the tax             
          identity of a corporation depends upon what the corporation does,           

               3The record, however, contains no evidence as to the source            
          of that income.                                                             

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