- 7 - not subsequently disregard that form in order to gain a tax advantage, see Moline Props., Inc. v. Commissioner, 319 U.S. 436 (1943). We recently decided a case presenting a question similar to the question in this case. In Pine Creek Farms, Ltd. v. Commissioner, T.C. Memo. 2001-176, the taxpayer-corporation raised corn, soybeans, and cattle. It also engaged in commodities trading activities involving corn, soybeans, cattle, and hogs, treating the losses therefrom as ordinary losses. The Commissioner recharacterized the portion of the overall loss attributable to hog futures as a capital loss, notwithstanding that the taxpayer’s majority shareholder was a major shareholder of two other closely held corporations that conducted hog farrowing and hog finishing operations, respectively. In upholding respondent’s determination, we stated: Therefore, the business transactions of * * * [the corporations engaged in the hog business] cannot be attributed to * * * [the common shareholder] and from * * * [the common shareholder] to petitioner. We find no exceptional circumstances which would cause us to ignore the corporate entities and attribute the production of hogs to petitioner. While it may have been easier for * * * [the common shareholder] to maintain all the hedging transactions in one account under petitioner’s name, the hog futures transactions cannot be treated as hedging transactions of petitioner. * * * Under the reasoning of Pine Creek Farms, Ltd. v. Commissioner, supra, the business activities of the corporations cannot be attributed to Mr. Welter. Petitioners do not arguePage: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011