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business in a corporate form and chose not to file an election
for S corporation treatment under section 1362. McGee
Landscaping was held out as a corporation, and petitioner
presented no evidence that McGee Landscaping was, in fact,
petitioner’s alter ego.
While a taxpayer may challenge the form of a transaction if
necessary to avoid unjust results, we can find no injustice in
characterizing McGee Landscaping as a corporation and not as a
sole proprietorship or passthrough entity. See Spector v.
Commissioner, 641 F.2d 376 (5th Cir. 1981), revg. 71 T.C. 1017
(1979). Indeed, the Supreme Court has established a general rule
that the separate existence of a corporation is to be respected
for tax purposes. See Moline Properties v. Commissioner, 319
U.S. 436 (1943).
Petitioner was free to run McGee Landscaping as he saw fit
and chose to operate it as a separate corporate entity.
Petitioner simply cannot retrospectively disavow the form in
which he chose to operate his landscaping business in order to
obtain certain tax benefits. Petitioner has failed to present
any evidence indicating that McGee Landscaping did not possess a
separate existence. Accordingly, we decline to disregard the
corporate form of McGee Landscaping. Therefore, the gains and
losses of McGee Landscaping are not reportable on petitioner’s
individual income tax return.
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