Group Administration Premium Services, Inc., et al. - Page 7

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          earnings and profits available for distribution to shareholders.            
          See infra pp. 23-27.                                                        
               On February 24, 1987, petitioner incorporated the individual           
          life and disability portion of his business under the name                  
          Jerome J. Mancuso & Associates, Inc. (JJM).  Petitioner                     
          transferred $1,000 to JJM in exchange for 1,000 shares of JJM               
          common stock.  Petitioner also transferred to JJM a $20,000 bank            
          deposit, an account receivable of $16,000, and office furniture,            
          fixtures, and equipment valued by petitioner at $37,000.                    
               Petitioner and Mr. Pritten prepared six promissory notes               
          from JJM to petitioner.  All of the notes issued by JJM are                 
          preprinted "fill in the blank" promissory notes and signed in               

          Residential      9,389.13        Telephone/Sprint 782.86                    
          Cash-personal    61,553.50       Legal/prof.      2,100.00                  
          Bonus-JJM        13,064.20       Travel/ent.      27,666.94                 
          Medical/dental   1,889.47        Repairs          156.00                    
               The total of all payments listed in Exhibit 14-N is                    
          $211,450.  Respondent contends that the amounts contained in                
          Exhibit 14-N should be increased by $930.11 for the payment of              
          petitioner’s auto insurance.  With this amount added to the                 
          amounts in Exhibit 14-N, the total payments amount to $212,380.             
               We do not know which payments were made by JJM and which               
          payments were made by GAPS.  Petitioner used one operating                  
          account, in the name of JJM, to make all the payments.                      
          Consequently, all the copied checks attached to Exhibit 14-N are            
          JJM checks.  Exhibit 14-N does not differentiate between payments           
          made by GAPS and JJM, and respondent never apportioned the                  
          specific payments between the two corporations.  Of the $212,380,           
          we have apportioned $119,760 as the amount of the payments from             
          GAPS and $92,620 as the amount of the payments from JJM.  For a             
          discussion of how we apportioned the total payments between GAPS            
          and JJM, see infra note 8.                                                  




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