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corporation was changed to Cedilla Co. She did not know that she
had owned any of the stock of IRA after the name change. She
testified that she owned New Cedilla Co. and that she conducted
her real estate brokerage business individually as well as
through IRA and New Cedilla Co.
The name change occurred in 1978, the same year IRA
purchased the stock of Schnitzer-PMS and the payments to IRA
related to the Prudential transactions began. In 1979, when IRA
acquired the stock of KWJ Corp., Schaffel began splitting
commissions with Kanter, and Century repurchased IRA’s Schnitzer-
PMS stock. When Cedilla Co.'s name was changed to IRA, whatever
the purpose Cedilla Co. was originally formed to pursue, it is
evident that purpose went along with the name to a new Cedilla
Co.
We find that the corporations and entities were not
organized for any valid business purposes.
A corporation is not treated as carrying on a business
merely because it engages in certain corporate formalities, such
as holding corporate meetings, adopting bylaws, electing officers
and directors, issuing securities and keeping separate books.
See Aldon Homes, Inc. v. Commissioner, 33 T.C. 582, 600-601
(1959). In order to be treated as carrying on a business, in
addition to engaging in corporate formalities, the corporation
must hold itself out to unrelated third parties and engage in
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