27
deduction for management services and management wages, and the
only remaining payment by Edco for which we must consider
substantiation is the entire $7,200 paid in rent to Mr. Munro,
for which respondent now demands substantiation. The record
supports the conclusion that this amount was paid.13
For Alondra, the record similarly supports the conclusion
that as much of the entire rental expense of $225,203 for which
Alondra claimed a deduction as was supposed to have been paid to
Mr. Munro was indeed paid to him.14 Moreover, the substantiated
amount that Alondra paid Pertinax during Alondra's fiscal 1987,
namely, $2,131,127 ($900,000 + $1,231,127) exceeds $2,123,744,
the sum of the originally challenged $884,148 representing
reimbursement of wages paid by Pertinax, plus the total of
$1,239,596 deducted by Alondra as ordinary and necessary expenses
for management services.
Inasmuch as payment of the challenged amounts is either
adequately supported by the record or need not be considered by
us for other reasons, corporate petitioners' motion is moot, and
we therefore deny it.15
13Mr. Munro appears to have reported as rental income in his
1987 individual income tax return amounts comparable to those
allegedly paid by the entities and claimed by them as deductions.
Mr. Clearman's testimony at trial supports the conclusion that
the rent payments were made.
14See supra p. 21.
15However, in our view the language of the statutory notices
(continued...)
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