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payment of corporate expenses. See Deputy v. duPont, 308 U.S.
488, 494 (1940); Gantner v. Commissioner, supra. Shareholders
cannot deduct on their personal returns those expenses that have
a primary purpose of furthering the business of the corporation.
See Leamy v. Commissioner, 85 T.C. 798, 809 (1985).
It appears from the Virginia proposal that Sky Shuttle,
Inc., was a participant. Petitioner testified that it was
beneficial to have a corporation in order to associate with other
firms and major corporations with regard to the Sky Shuttle
activity. From the Virginia proposal, it is evident that Sky
Shuttle, Inc., was expected to provide the technology.
Petitioner stated that the other corporations were aware that Sky
Shuttle, Inc., was only a paper corporation, but this is
contradicted by his testimony that it was important to have the
status of a corporation in order to deal with the other
companies.
We find that Sky Shuttle, Inc., served its intended business
function. Petitioner used Sky Shuttle, Inc., to promote the Sky
Shuttle activity, and it appears that others regarded Sky
Shuttle, Inc., as a participating corporation in the Virginia
proposal. See Moline Properties, Inc. v. Commissioner, supra at
438-439. Therefore, any expenses incurred by petitioner on the
corporation’s behalf in connection with the Sky Shuttle activity
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