- 25 - 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 AcmePage: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Next
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