- 14 - methodology. Petitioners have, therefore, failed to prove that respondent's method, based as it was on gross sales, did not satisfy the independent transactions standard and, thus, reflect arm's-length charges for purposes of this case. See supra sec. II.D. Further, petitioners did not even address the individual allocations resulting from respondent's method beyond arguing that they would be different had Ms. Camper's method weighed the unusual events more heavily. Finally, since the practice of the group was to separate real estate ownership from restaurant operation, the unusual events in question that involved the destruction or construction of improvements to real property (see supra, note 3), affected the real estate holding companies.4 Ms. Camper testified that, in allocating management cost share expenses to the real estate holding companies, she took into account not only those members' gross sales (which were very low) but also some measure of the time spent with respect to those members. Undoubtedly, management time was necessary to deal with the destruction and construction caused by the unusual events and, to that extent, Ms. Camper did take account of the unusual events. Petitioners have not persuaded us that it was arbitrary, capricious, or unreasonable for Ms. Camper to deal with the real estate holding companies as she did, nor have petitioners 4 For instance, it was Harding Highway Realty, Inc. and not Kenco, that incurred the loss from the fire, filed the claim, received the proceeds from the insurance company, sold the property and received the proceeds therefrom, and incurred the costs of building the new facility.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011