Amdahl Corporation and Consolidated Subsidiaries - Page 11

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          disposition of relocating employees' residences.  Reimbursed                
          costs include expenses for:  appraisal and inspection, repair and           
          maintenance, improvements, utilities, insurance, property taxes,            
          homeowner association fees, mortgage payments, other expenses               
          directly attributable to specific residences, interest charged on           
          direct and indirect expenses, gain or loss on the sale to third             
          parties, broker commissions, and other closing costs.  In                   
          addition, petitioner pays the RSC a fee of 1.25 percent of the              
          appraised value of the residences in regular sales, and either .5           
          percent (Intergroup) or 1 percent (Transamerica and VanRelco) of            
          the appraised value in assigned sales.  The RSC bears no risk of            
          loss in connection with the sale of the residences.                         
               During the years in issue, petitioner provided home disposal           
          assistance to at least 188 employees, 176 of which are in issue.            
          Approximately 74 percent of the home sales in issue were regular            
          sales, and 26 percent were assigned sales.  Petitioner did not              
          intend to acquire legal title to the residences.  It viewed the             
          costs associated with assisting relocating employees in the sale            
          of their residences as an expense of conducting its computer                
          business and did not intend to profit from the sale of the                  
          residences to third parties.  Petitioner was primarily concerned            
          with inducing employees to relocate and ensuring that the                   
          residences were sold quickly.  Petitioner generally does not hold           

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Last modified: May 25, 2011