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Power, but that this reduction did not occur until the end of
1974 rather than 1971. Other than his testimony, petitioner did
not present any evidence to support a transfer of stock control
prior to 1974. Given the behavior of petitioner and the
employees involved, as well as the apparent attitudes of those
who dealt with them in business transactions between 1971 and
1974, we question whether petitioner gave up full ownership of
Diesel Power without documentary support before November 1974,
when petitioner sold 60 percent of his interest in Diesel Power
to the Khalatbaris. While this was a "family" business where a
certain amount of informality is to be expected, we think a
transaction of such magnitude, if it had occurred in 1971, would
have been accompanied by some written evidence. Petitioner has
presented none. Therefore, we conclude that petitioner continued
to own 100 percent of Diesel Power until at least November 1974.26
However, it is still possible that petitioner was
sufficiently subject to the direction and control of Diesel Power
in a meaningful sense even prior to the end of 1974, so that it
would be correct to allow its income to be taxed separately from
petitioner within the meaning of Johnson v. Commissioner, 78 T.C.
at 891. Similarly, it also is possible that petitioner retained
26 Similarly, petitioner's statements at trial that Diesel Power
"instructed" CTC to "pursue receipt of commissions and to transfer them to
Diesel Power" is not supported by any contemporaneous documentary evidence.
Documents reviewed by the Court indicate instead that it was at petitioner's
instructions that such pursuit of commissions was accomplished.
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