Derwyn J. Booker - Page 14

          appraisal listing the master’s value at $500,000.  Mr. Tirk,                
          respondent’s expert witness, has been in the record business for            
          36 years in various positions including manufacturer,                       
          distributor, wholesaler, retailer, and executive vice president             
          and owner of his own record company.  Mr. Tirk’s valuation is               
          based upon many factors including the slight market for the                 
          particular music involved, the limited number of retail outlets             
          that carry that type of music, the improbability of generating              
          any sales from exploitation of the product, petitioner’s complete           
          lack of experience in the industry, the relative obscurity of the           
          artists involved, and the poor quality of the master.  Mr. Tirk             
          valued the subject master at $3,000 to $5,000.                              
               The manner in which the lessee carried on his or her                   
          activities can also be evidence of a lack of economic substance.            
          Pasternak v. Commissioner, supra at 900-901.  Petitioner blindly            
          signed the form lease, failing to negotiate any of the lease                
          terms, and purchased no insurance on the master although the                
          master was purportedly worth $496,000.  Petitioner did not obtain           
          an independent appraisal with respect to either the value of the            
          subject master or the possibility of making a profit with the               
          master.  Furthermore, petitioner neither listened to the master             
          nor determined the quality of the master before signing the lease           
               Assuming that petitioner had a one-third interest in BBG,              
          his share of the initial contribution amount advanced to Encore             

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