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of Imports. Petitioner owned 50 percent or more of 7 of the 13
other entities.
The management services provided by Investments included
consulting in the following areas: Accounting, finance, legal,
sales, marketing, and personnel management. These services were
provided both periodically and on an as-needed basis.
The fees Investments charged for management services were
billed and paid monthly. During the taxable years 1988 and 1989,
Investments billed management fees of $814,452 and $970,997,
respectively.
During 1988 and 1989, Investments owned a Lear Jet Model 25D
airplane (airplane). Investments used the airplane for travel
associated with the operating divisions and travel associated
with its management services activity.
In regard to the operating divisions, the airplane was used
by Rich Ford Sales to transport its employees to conventions and
seminars. The airplane was also used to fly key management
personnel to Detroit, Michigan, to respond to urgent business
Rich Ford Sales had with Ford. Also, Rich Ford Sales used the
airplane to take employees to automobile shows.
In connection with the management services activity,
Investments’ employees used the airplane to travel to the
following other entities during the taxable years at issue:
Pioneer, Fiesta Lincoln, Fiesta Dodge, Heritage, and Sunland.
Pioneer was located in Phoenix, Arizona. Fiesta Lincoln and
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