Theodore Souris, P.C., A Dissolved Corporation, and Theodore Souris, As Successor in Interest of Theodore Souris, P.C. - Page 9

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          corporation, standing in its shoes, as an "employer reversion"--a           
          term that is defined in section 4980(c)(2) as follows:                      
               The term "employer reversion" means the amount of cash                 
               and the fair market value of other property received                   
               (directly or indirectly) by an employer from the                       
               qualified plan.  [Emphasis added.]                                     
          Then, in his capacity as successor in interest of his employer,             
          Mr. Souris passed that employer reversion to himself as the                 
          employee pursuant to the 1981 employment agreement.  To be sure,            
          these steps were telescoped into a single payment to Mr. Souris,            
          who mistakenly reported the reversion in his individual return              
          rather than amending the corporate returns and then reporting the           
          same amount as additional compensation on his individual return.            
          However, Mr. Souris' failure to follow this procedure in separate           
          steps does not detract from the essence of the situation if we              
          are to treat the corporation and Mr. Souris as separate taxpaying           
          entities, as we are required to do.                                         
               We conclude that the $171,476 reversion represents                     
          additional compensation (increased bonus) paid by the                       
          corporation.  Further, the corporation's income from the law                
          partnership was equal to the value of Mr. Souris' services, and,            
          as passed through to him by the corporation, it became the basis            
          for a deduction by the corporation under section 162(a)(1)4 as "a           

          4  Sec. 162.  Trade or business expenses.                                   
                    (a)  In general.--There shall be allowed as a                     
                                                             (continued...)           




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