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Having elected to conduct the business in corporate form,
petitioner is bound by the Federal income tax consequences of
that election. See Higgins v. Smith, 308 U.S. 473 (1940).
Drywall's corporate existence cannot be disregarded for Federal
income tax purposes, and petitioner's argument that it should be
is rejected. Because the lease cancellation fee was an expense
of Drywall, petitioner is not entitled to include the payment of
the fee in the rent expense deduction claimed on her return.
Respondent's determination in this regard is sustained.
To reflect the foregoing and the concessions of the parties,
Decision will be entered
under Rule 155.
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Last modified: May 25, 2011