Legal Dictionary of Pakistan

collapsible corporation

A corporation formed to give a short-term venture the appearance of along-term investment in order to portray income as capital gain, rather than profit. ( The corporation is typically formed for the sole purpose of purchasing property. The corporation is usu. dissolved before the property has generated substantial income. The Internal Revenue Service treats the income earned through a collapsible corporation as ordinary income rather than as capital gain. IRC (26 USCA) § 341(a). Cf. collapsible partnership under PARTNERSHIP.