- 10 -
Mrs. Comey acquired all of Landtrak’s stock and transferred
ownership of the Capital Fund shares to Landtrak as a
contribution to its capital. Although petitioners admitted that
the Capital Fund shares were held in Mrs. Comey’s name when sold,
petitioners claim that Mrs. Comey held the shares (and received
the sales proceeds) as Landtrak’s agent or nominee.
For the reasons set forth below, we conclude that Mrs. Comey
neither acquired Landtrak’s stock, nor transferred ownership of
her Capital Fund shares to Landtrak, on January 1, 1987. To the
contrary, we find that Landtrak’s incorporator, Robert Riopelle,
remained the sole owner of Landtrak’s stock until February 1988,
more than 1 year after the date identified by petitioners.
Moreover, although Landtrak’s stock ultimately was issued to Mrs.
Comey after Mr. Riopelle’s ownership ended, we find that Mrs.
Comey never transferred ownership of her Capital Fund shares to
Landtrak and did not act as Landtrak’s agent or nominee.
Finally, we hold that even if Mrs. Comey had, in form,
transferred her Capital Fund shares to Landtrak at some time
before their sale in 1991, Landtrak would not be recognized as
the owner of the shares for tax purposes, because Landtrak had no
business purpose and engaged in no business activity after Mr.
Riopelle’s ownership ended.
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