Strong v. Commissioner

Petitioners, in connection with an apartment complex to be constructed and operated by them as partners, formed a corporation to obtain financing at a rate of interest in excess of the limit imposed by State law on loans to individuals. Title to the property was transferred to the corporation which executed the various documents relating to the financing and engaged in other related activities. Held, the corporation was not merely a nominee whose existence could be ignored for tax purposes and the net operating losses during the years at issue were its losses and not those of the partnership.