- 12 - (the petitioner K-1) attached to the Niesar Pahl 1990 return, petitioner is identified as a shareholder of the corporation. Petitioner is likewise identified as a shareholder on a Schedule K-1 attached to Niesar Pahl’s 1989 income tax return. Petitioner’s compensation package resembled that of a shareholder-employee, not a nonshareholder-employee. Niesar Pahl was engaged in a service business, the practice of law, and, as law firms go, it was not particularly large. Petitioner’s positions, as president, managing partner, and chief financial officer, strike us as typical of an owner (partner) or principal, rather than as a mere employee. Indeed, the minutes of the August 3 meeting of the board of Niesar Pahl state that the corporation “shall issue and sell to * * * [petitioner] one thousand (1,000) shares of common stock, such action to take effect on August 9, 1989". (Emphasis added.) There is no explicit date for satisfaction of the price term: the price to be paid by * * * [petitioner] for such shares shall be determined by an audit of the corporation’s balance sheet as at July 31, 1989; and * * * [petitioner] shall pay in cash, the amount equal to * * * [one-quarter] of the net worth of the corporation as determined by reference to such audited balance sheet as at July 31, 1989, as and for the total purchase price of said purchasers’ [sic] 1000 shares of common stock. 1(...continued) since Niesar testified that he actually saw Pahl sign the guarantee. We disbelieve petitioner’s testimony to the contrary. The requirements of Fed. R. Evid. 1003 are met, and Exhibit O was properly received into evidence.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011