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petitioner's banking relationships would have been hurt if
petitioner had signed a 12-year lease. For each of the years in
issue, petitioner had retained earnings of from $1 million to $2
million.
Petitioner contends that it paid more rent to Mr. Cummings
than Mr. Cummings paid to the Red Cross because petitioner had a
month-to-month lease instead of a 12-year lease. Mr. Cummings
also testified that binding petitioner to one location for 12
years would hurt its ability to grow and move. We believe that
petitioner overstates the value of having a month-to-month lease,
especially considering that petitioner had spent $1 million to
adapt the property to its own needs.
Petitioner contends that a business reason for renting from
Mr. Cummings is that it could pay rent late if necessary.
However, petitioner had no right to pay rent late. Petitioner in
fact paid rent on time. Petitioner's claim that Mr. Cummings
might give it a break is entirely speculative.
The points cited by petitioner are far outweighed by the
fact that it paid rent of $730,000 for the 3 years in issue
instead of the $293,925 Mr. Cummings paid to the American Red
Cross.
Petitioner contends that W.H. Braum Family Partnership v.
Commissioner, T.C. Memo. 1993-434, is strikingly similar to the
instant case. We disagree. That case did not involve a lease
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