Lynnda Speer, Donor, et al. - Page 15

                                       - 15 -                                         
          Pioneer and HSC, HSN made the following payments to Pioneer,7 and           
          Pioneer included these amounts in its income:                               

                     Calendar Year               Amount                               
                         1985                $56,011.30                               
                         1986                700,645.57                               
                         1987                2,434,457.52                             
                         1988                2,453,928.21                             
                         1989                2,637,191.00                             
                         1990                3,136,668.00                             
                         1991                3,639,988.00                             
                         1992                3,441,262.00                             

          Mr. Speer sold his HSN stock to Liberty Media Corp. (Liberty) in            
          February 1993.  After the sale, HSN discontinued making the 1-              
          percent license payments to Pioneer.  After engaging in various             
          litigation, HSN agreed to pay Pioneer approximately $4,500,000 to           
          terminate the License Agreement.                                            
          Passive Activity Loss Issue                                                 

               During 1988, 1989, and 1990, Mr. Speer and Mr. Paxson owned            
          51 percent and 49 percent, respectively, of the stock of Gateway            
          Marine, Inc. (Gateway).  Gateway was an S corporation that                  
          operated a marine tug and barge business.  Mr. Speer set up the             
          corporation, hired its employees, handled finances, discussed the           
          company’s bids, and purchased equipment for the company.                    
          Petitioners reported losses from Gateway of $24,882, $77,909, and           


          7We note that the 1-percent payment by HSN to HSC under the                 
          License Agreement terminated in early 1986, when HSC merged into            
          HSN.  HSN continued to pay Pioneer the 1-percent license fee.               




Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  Next

Last modified: May 25, 2011