Scott C. and Sherry L. Russon - Page 5

                                        - 5 -                                         
          purchased the stock.  Milton, Dale, and Leo sold the Russon                 
          Brothers stock to Scott, Brent, Robert, and Gary so the four sons           
          of the three fathers could actively continue the mortuary                   
          business.                                                                   
               All the assets of Russon Brothers, except for a mutual fund            
          acquired by the company in 1989 for $12,000 with a 1995 value of            
          $20,000, are used actively in the mortuary business.  The                   
          checking account of Russon Brothers has an average balance of               
          $70,000 with cash available of $30,000 and is all actively used             
          in the mortuary business.                                                   
               Russon Brothers has never paid interest, dividends,                    
          annuities, or royalties to any of its shareholders during its               
          existence of 26 years.  Beginning before December 23, 1985, and             
          continuing through all years involved in the tax matter before              
          the Court, Scott, Brent, Robert, and Gary actively and materially           
          participated in Russon Brothers as an active mortuary business on           
          a regular, continuous, and substantial basis in excess of 40                
          hours per week.  Scott, Brent, Robert, and Gary have never been             
          engaged in the trading or dealing of stocks or securities.                  
               Section 163(a) allows "as a deduction all interest paid or             
          accrued within the taxable year on indebtedness."  However,                 
          section 163(d)(1) provides that "In the case of a taxpayer other            
          than a corporation, the amount allowed as a deduction under this            
          chapter for investment interest for any taxable year shall not              
          exceed the net investment income of the taxpayer for the taxable            




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  Next

Last modified: May 25, 2011