- 36 -
that Landtrak had any business purpose or engaged in any business
activity after Mr. Riopelle’s ownership ended in 1988. Id.
Accordingly, Landtrak’s formal ownership of Mr. Comey’s
portfolio, following Mr. Comey’s transfer of title to Landtrak in
mid-1992, is disregarded for tax purposes. See Moline Props.,
Inc. v. Commissioner, 319 U.S. at 438-439 (citing Higgins v.
Smith, 308 U.S. at 477-478 and Gregory v. Helvering, 293 U.S. 465
(1935)); Shaw Constr. Co. v. Commissioner, 35 T.C. at 1113-1114.
Third, we have found that Mr. Comey did not transfer even
title ownership of his portfolio to Landtrak until mid-1992. A
short time later, in August 1992, the portfolio was sold by
PaineWebber, and the sales proceeds were transferred to
Switzerland. There is no evidence that Landtrak, which engaged
in no business, ever had dominion and control or beneficial
ownership of the sales proceeds. Under these circumstances,
Landtrak served as a mere “conduit”, and its purported transitory
ownership of Mr. Comey’s portfolio must be disregarded for tax
purposes, even if Landtrak’s existence as a separate taxpayer
should not be disregarded. See Commissioner v. Court Holding
Co., 324 U.S. 331, 334 (1945) (sale by one person cannot be
transformed for tax purposes into sale by another by using the
latter as a conduit through which to pass title); Aiken Indus.,
Inc. v. Commissioner, 56 T.C. 925 (1971) (even a valid
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