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Petitioner argues that the entire amount of compensation
(viz., $2,600,000) it paid to Mr. Ruf during, and deducted for,
its taxable year ended February 28, 1990, was reasonable. Of
that total amount, petitioner contends that $800,000 represented
compensation to Mr. Ruf for services he provided during its
fiscal year ended February 29, 1988, $800,000 represented compen-
sation to Mr. Ruf for services he provided during its fiscal year
ended February 28, 1989, and $1 million represented compensation
to Mr. Ruf for services he provided during its fiscal year ended
February 28, 1990.
As part of its argument that the compensation paid Mr. Ruf
during its fiscal year ended February 28, 1990, was attributable
in part to services he provided during its fiscal years ended
February 29, 1988, and February 28, 1989, petitioner contends
that the $933,333 in compensation paid to Mr. Ruf during its
fiscal year ended February 28, 1989, pursuant to the 1987 de-
ferred compensation arrangement was awarded as compensation to
Mr. Ruf for services rendered during its fiscal year ended
February 28, 1987. Thus, according to petitioner, it awarded the
following amounts of compensation to Mr. Ruf for the years
indicated, and those amounts are reasonable:
Year Ended Compensation
Feb. 28, 1987 $1,328,936
Feb. 29, 1988 933,000
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