- 109 -
deductions, petitioner points out that interest deductions at-
tributable to the loans at issue provided little benefit to
Radcliffe and BOT for certain years at issue. Indeed, according
to petitioner, such deductions gave no benefit to Radcliffe and
BOT for other years at issue because those corporations would
have reported losses in their income tax returns for such other
years without taking account of the interest deductions claimed
with respect to the loans in question.
As was true of respondent, petitioner advances certain
contentions concerning the relationships of the persons involved
in the Bank transactions. Petitioner contends that during the
years at issue the banks in question were (1) "commercial banks
engaged in the commercial banking activity" and (2) independent
of Radcliffe, BOT, or the foreign corporations pledging collat-
eral in that they were not subsidiaries of or otherwise con-
trolled by those companies. Petitioner further asserts that
during those years Mme. Koo owned the foreign corporations pledg-
ing collateral, with the exception of Merit and Pempire,76 imply-
ing, although never explicitly contending, that she controlled
those corporations. (Hereinafter, that contention will be re-
ferred to as petitioner's control contention.)
76 Petitioner seems to contend, and respondent does not dispute,
that after S.C. Gaw's death in October 1983 petitioner's mother
acquired all of the stock of Merit and therefore indirectly
acquired all of the stock of Merit's wholly owned subsidiary,
Pempire. The parties stipulated that petitioner acquired all of
the stock of Pempire no later than July 1984.
Page: Previous 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 NextLast modified: May 25, 2011