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of gross sales for 1989 and 1990); and Comtec Sys., Inc. v.
Commissioner, T.C. Memo. 1995-4 (compensation was 28.1 percent of
gross sales for Vernon Beard and 2.3 percent for Reda Beard). We
disagree with petitioner's reliance on those cases. We did not
calculate or consider compensation as a percent of gross sales or
gross receipts in any of these cases except for BOCA Constr.,
Inc. v. Commissioner, supra. We calculated those percentages
based on facts found in those cases. In those cases, we
considered compensation as a percent of net sales, net profit, or
gross profit, but not compensation as a percent of gross sales.
RAPCO, Inc. v. Commissioner, supra; Donald Palmer Co. v.
Commissioner, supra; Acme Constr. Co. v. Commissioner, supra; and
Comtec Sys., Inc. v. Commissioner, supra.
In Donald Palmer Co. v. Commissioner, supra, we concluded
that a salary equal to 58.2 percent of gross profit was
reasonable because that percentage was similar to what the
taxpayer had paid in prior years. Here, we have no evidence of
management fees as a percent of gross profit that petitioner paid
in prior years. Acme Constr. Co. v. Commissioner, supra, and
Comtec Sys., Inc. v. Commissioner, supra, are unlike this case
because some pay during the years in issue in those cases was
catchup pay for prior years. Acme Constr. Co. v. Commissioner,
supra, is unlike this case because the executive there personally
guaranteed all of the taxpayer's debt. The taxpayers in Acme
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