John L. Ginger Masonry, Inc. - Page 12

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                         1989           1,294,4272                                    
                         1990                 1,312,490                               
                         1991                 1,162,589                               
                         1992                 1,185,315                               
               Petitioner claimed deductions for officer's compensation in            
          the amounts of $1,069,001 and $396,698 for the fiscal years 1990            
          and 1992, respectively.                                                     
          D. Others Familiar With Petitioner                                          
               Christenson, petitioner's accountant, assisted in the                  
          formation of petitioner in 1984, and his accounting firm has                
          reviewed petitioner's financial statements since 1985.                      
          Approximately 90 percent of Christenson's clients are in the                
          construction industry.                                                      
               Christenson considered Ginger the sole marketing person for            
          petitioner, and he characterized Ginger's sales and marketing               
          abilities as "amazing".  Christenson noticed that Ginger had an             
          "intuition" in matters, such as profitability, overhead                     
          management, and the need to maintain volume to break even.                  
          Ginger was a rare client in that he invited Christenson to                  
          economic forecast luncheons.                                                
               Petitioner's banker, Greg Adamson (Adamson), talked with               
          petitioner's vendors, customers, and competitors.  Such contacts            
          were common during Adamson's management of a client's portfolio.            
          Adamson concluded that petitioner had a very solid reputation in            

               2 We have adjusted the shareholders' equity figure for the             
          fiscal year ended June 30, 1989, to account for the recording               
          error entered supra note 1.                                                 




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