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Maine law as well. See Moline Props., Inc. v. Commissioner,
319 U.S. 436 (1943) (holding that for Federal income tax
purposes, a corporation and its shareholders are separate
entities); see also LaBelle v. Crepeau, 593 A.2d 653, 655
(Me. 1991) (likewise holding that under Maine law, a corporation
and its shareholders are separate entities).
The 2000 lease cannot be considered merely a continuation of
the 1985 lease if only because the parties to those two lease are
not the same. Consequently, the rental income petitioner
received in accordance with the 2000 lease cannot be considered
to be from a written binding contract entered into before
February 19, 1988. It follows that the transitional rule set
forth in section 1.469-11(c)(1)(ii), Income Tax Regs., is not
applicable. It also follows that the recharacterization rule
provided in section 1.469-2(f)(6), Income Tax Regs., requires
that the rental income petitioner received from the corporation
cannot be treated as passive income with the meaning of section
469.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: March 27, 2008