BOCA Construction, Inc. - Page 7

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            116, 120 (5th Cir. 1992), affg. in part and revg. in part T.C.                              
            Memo. 1991-189; Estate of Perry v. Commissioner, 931 F.2d 1044,                             
            1046 (5th Cir. 1991); Powers v. Commissioner, supra at 471.                                 
            The taxpayer need not show bad faith to establish that the                                  
            Commissioner's position was not substantially justified for                                 
            purposes of a motion for litigation costs under section 7430.                               
            Estate of Perry v. Commissioner, supra; Powers v. Commissioner,                             
            supra.                                                                                      
                  b.    Respondent's Basis in Fact                                                      
                  Respondent's position in Boca Constr., Inc. v. Commissioner,                          
            supra, was that the compensation petitioner paid to its officers                            
            of $689,600 for 1989 and $817,500 for 1990 was unreasonable and                             
            that compensation of not more than $274,000 for 1989 and $282,000                           
            for 1990 would have been reasonable.  Whether compensation is                               
            reasonable is a question of fact.  Botany Worsted Mills v. United                           
            States, 278 U.S. 282, 289-290 (1929); Trinity Quarries, Inc. v.                             
            United States, 679 F.2d 205, 210 (11th Cir. 1982); Estate of                                
            Wallace v. Commissioner, 95 T.C. 525, 553 (1990), affd. 965 F.2d                            
            1038 (11th Cir. 1992).                                                                      
                  Petitioner points out that in Boca Constr., Inc. v.                                   
            Commissioner, T.C. Memo. 1995-5, we considered 12 factors in                                
            deciding whether compensation was reasonable.  We concluded that                            
            eight favored petitioner and four were neutral.  However, we                                
            believe that respondent's position had a basis in fact because                              





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