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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 argue
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