- 35 - petitioner's banking relationships would have been hurt if petitioner had signed a 12-year lease. For each of the years in issue, petitioner had retained earnings of from $1 million to $2 million. Petitioner contends that it paid more rent to Mr. Cummings than Mr. Cummings paid to the Red Cross because petitioner had a month-to-month lease instead of a 12-year lease. Mr. Cummings also testified that binding petitioner to one location for 12 years would hurt its ability to grow and move. We believe that petitioner overstates the value of having a month-to-month lease, especially considering that petitioner had spent $1 million to adapt the property to its own needs. Petitioner contends that a business reason for renting from Mr. Cummings is that it could pay rent late if necessary. However, petitioner had no right to pay rent late. Petitioner in fact paid rent on time. Petitioner's claim that Mr. Cummings might give it a break is entirely speculative. The points cited by petitioner are far outweighed by the fact that it paid rent of $730,000 for the 3 years in issue instead of the $293,925 Mr. Cummings paid to the American Red Cross. Petitioner contends that W.H. Braum Family Partnership v. Commissioner, T.C. Memo. 1993-434, is strikingly similar to the instant case. We disagree. That case did not involve a leasePage: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Next
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