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are not deductible. Latham Park Manor, Inc. v. Commissioner, 69
T.C. 199, 218 (1977), affd. without published opinion 618 F.2d
100 (4th Cir. 1980).
The cases contain a lengthy list of factors that are
relevant in the determination of reasonableness of compensation,
including: The employee’s qualifications; the nature, extent,
and scope of the employee’s work; the size and complexities of
the business; a comparison of salaries paid with gross income and
net income; the prevailing general economic conditions; a
comparison of salaries with distributions to stockholders; the
prevailing rates of compensation for comparable positions in
comparable concerns; the salary policy of the taxpayer as to all
employees; and the amount of compensation paid to the particular
employee in previous years. Mayson Manufacturing Co. v.
Commissioner, 178 F.2d 115, 119 (6th Cir. 1949), revg. a
Memorandum Opinion of this Court dated Nov. 16, 1948.
Petitioners applied to the facts in the instant cases the
factors listed in Mayson Manufacturing Co. and conclude in their
brief that “it is clear that the management and consulting fees
at issue were ordinary, necessary, reasonable and consistent with
an arm’s-length charge.” The facts on which petitioners base
their conclusion include Eurotor’s oversight of the Medieval
Times operations, RC’s catering and ranch operations, and Segui’s
and Santandreu’s positions as members of various boards of
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