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Grow Pork and Reis Ag and the grain is fed to the pigs owned by
the latter corporations.
All three of these corporations have a common shareholder,
John Reis (Reis). Reis owns 51 percent of the stock of
petitioner, and Kay Reis, his wife, owns the other 49 percent.
Reis owns 50 percent of the stock of Reis Ag, and his brother
owns the other 50 percent. Reis owns 20 percent of the stock of
Grow Pork, and there are four other 20 percent shareholders.
Each of the three corporations is a C corporation that maintains
separate business operations with separate books, records, and
bank accounts.
Prior to incorporating petitioner, Reis maintained a
commodities account with Frontier Futures, Inc. (Frontier) which
he used as a hedge account. When petitioner was incorporated,
Reis' commodities account with Frontier was transferred to
petitioner. Neither Reis Ag, Grow Pork, Reis, nor Kay Reis
maintains any commodities accounts. Reis stated that it was
simpler to have petitioner maintain a hedge account because he
and his wife owned petitioner. He also stated that this made for
more accurate and simpler maintenance of records for all
purposes, including tax reporting, whereas utilizing a hedge
account for the other corporations would have been very difficult
because of the spread of ownership.
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Last modified: May 25, 2011