A.C. Green Electrical Contractors, Inc. - Page 6

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          spouse receives additional annuity payments after the                       
          participant's death.                                                        
               On the basis, in part, of Silberstein’s treatment of the               
          plans as establishing subsidized joint and 100-percent survivor             
          annuities for Rozenblatt and Jakubowicz and their spouses,                  
          petitioner made contributions to the plans in the total amounts             
          of $227,646, $226,794, and $226,794, respectively, for each of              
          the years 1987, 1988, and 1989.                                             
               On its Federal income tax returns for years ending                     
          September 30, 1987, 1988, and 1989, petitioner claimed deductions           
          under section 404 for the above total respective contributions to           
          the plans in each year.                                                     
               For the year ending September 30, 1990, petitioner did not             
          make any deductible contributions to the plans, and no deduction            
          with regard thereto was claimed on petitioner's 1990 Federal                
          income tax return.                                                          
               On audit of petitioner for 1987, 1988, and 1989, respondent            
          treated Rozenblatt and Jakubowicz as receiving under the plans              
          only a reduced joint and 100-percent survivor annuity.  The                 
          present value of a reduced joint and 100-percent survivor annuity           
          equals the present value of a single life annuity for the life of           
          the participant (i.e., the value of a single life annuity for the           
          life of the participant is spread over the actuarial life                   
          expectancies of the participant and the spouse).                            





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