1. Distinguishing Corporation From shareholders Commissioner versus versus Bollinger Bollinger 485 U.S. 340, 108 S.Ct. 1173 TX 8020 – Summer 2007

2. The Issue Whether a corporation holding title to a real property as an agent of the corporation’s shareholders is the owner of the property for purposes of federal income taxation Whether a corporation holding title to a real property as an agent of the corporation’s shareholders is the owner of the property for purposes of federal income taxation

3. Facts Partnership for developing apartments Partnership for developing apartments Incorporation in order to secure a loan Incorporation in order to secure a loan Written agreement claiming the corporation as an agent of Bollinger Written agreement claiming the corporation as an agent of Bollinger Income and losses reported on individual income tax returns Income and losses reported on individual income tax returns Losses on individual return disallowed by IRS Losses on individual return disallowed by IRS Court of Appeals decision challenged by IRS Commissioner Court of Appeals decision challenged by IRS Commissioner Certiorari granted by the Supreme Court Certiorari granted by the Supreme Court

4. Citations National Carbide Corp v.Commissioner, 336 U.S. 422 (1949) National Carbide Corp v.Commissioner, 336 U.S. 422 (1949) -- Corporation: relations with principal -- Corporation: relations with principal -- Six factors: standards of agency status -- Six factors: standards of agency status Moline Properties v. Commissioner 319 U.S. 436 (1943) Moline Properties v. Commissioner 319 U.S. 436 (1943) -- Corporation: as separate tax entity -- Corporation: as separate tax entity

5. Reasoning: National Carbide Factors No. 6: business purpose - carrying on normal duties of an agent. No. 6: business purpose - carrying on normal duties of an agent.  Commissioner: Corporation is the owner, not agent  Supreme Court: Respondent represented himself as the principal to all parties concerned with the loans. No. 5: relations not dependent on ownership No. 5: relations not dependent on ownership  Commissioner: “Arm’s length” relationship between corporation agent and shareholder principal  Supreme Court: Such relationship should not be the only test for “agency” status.

6. Conclusion The Supreme Court ruled in favor of Bollinger, affirming the decision of the 6 th Circuit Court of Appeals. The Supreme Court ruled in favor of Bollinger, affirming the decision of the 6 th Circuit Court of Appeals. The corporation is Bollinger’s agent which should be disregarded for tax purposes. The corporation is Bollinger’s agent which should be disregarded for tax purposes. Bollinger is the principal and owner of property for the purpose of federal income taxation. Bollinger is the principal and owner of property for the purpose of federal income taxation.