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that Mrs. Comey was acting as Landtrak’s agent with respect to
the Capital Fund shares.6 There is also no evidence that any
written agency agreement was entered into between Landtrak and
Mrs. Comey.
These considerations further support our conclusion that
Mrs. Comey was not acting as Landtrak’s nominee or other agent
and owned the Capital Fund shares when they were sold.
Landtrak’s Lack of Business Purpose or Activity
We further conclude, even if Mrs. Comey had in form
transferred her Capital Fund shares to Landtrak at some time
before their sale, that Landtrak would not be recognized as the
owner of the shares for tax purposes. This is because Landtrak
had no business purpose and engaged in no business activity after
Mr. Riopelle’s ownership ended.
A corporation is usually recognized as a taxpayer separate
from its shareholders. However, the corporate form may be
disregarded where the corporation is “a sham or unreal”. Moline
Props., Inc. v. Commissioner, supra at 438-439 (citing Higgins v.
Smith, 308 U.S. 473, 477-478 (1940) and Gregory v. Helvering, 293
U.S. 465 (1935)). More particularly, the corporate form may be
disregarded where the corporation’s purpose is not the equivalent
6 Although, as noted supra p. 15, in a 1990 letter to the
Commissioner written on Mrs. Comey’s behalf, Mr. Comey stated
that the Capital Fund shares were transferred to Landtrak on or
about Jan. 1, 1988.
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