- 4 -
her time working as an escrow officer. In total, Kleindienst
worked about 70 hours per week.
In addition to her work as an executive and escrow officer,
Kleindienst held seminars and met with realty boards, realtors,
real estate developers, attorneys, and accountants to promote
petitioner's business. Kleindienst estimated that she solicited
escrows that generated approximately $1.2 million of petitioner's
$1.46 million in gross receipts during each of the years in
issue. Both Lynne West (West), petitioner's accountant, and
Kleindienst believed that Kleindienst's services were essential
to petitioner's business success. Without the large number of
escrows she solicited, petitioner would not be a viable business.
Kleindienst's clients have generally followed her when she
changed firms. This factor makes Kleindienst more valuable.
Petitioner's gross receipts consisted solely of fees
generated from closing escrow transactions. To close an escrow,
an escrow officer must collect the purchase price and transfer
ownership of the property to the transferee. Not all escrows
that are originated are closed; about 75 percent of escrow
accounts close. Petitioner did not receive any fee when a client
opened an escrow. The average escrow closing generated an $800
fee, but petitioner has received fees as large as $20,000 for
closing an escrow.
During the years in issue, petitioner employed three to four
escrow officers, including Kleindienst. Escrow officers, except
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011