Melvin J. Laney and Carolyn A. Laney - Page 12

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            information systems Laney worked on at Dow, Lederle, Monsanto,                            
            Merrill, and Sterling-Winthrop were designed to be able to                                
            communicate with the computer system that would be put into place                         
            at R.K.                                                                                   
                  Although much time, effort, and money were spent in the                             
            design and planning of R.K., the only improvements ever made to                           
            the Island were trails, boardwalks, and some improvements to the                          
            landing sites.  R.K. did not become operational, either as a                              
            primate facility or as a source of data for computer systems.                             
                  Laney ordinarily did not use accountants in connection with                         
            his consulting trade or business.  However, around the start of                           
            his work on R.K., Laney told an accountant that R.K. was separate                         
            from his consulting activities and that he expected to put a lot                          
            of money into R.K., and that he wanted advice as to how to                                
            account for his R.K. expenditures for tax purposes and for                                
            accounting purposes.  The accountant advised him to separately                            
            account for expenditures that were investments in R.K., that                              
            Laney had a choice of deducting certain expenditures when paid or                         
            capitalizing the expenditures and deducting them later, and that                          
            it probably was better to capitalize and deduct later.  Laney                             
            agreed, and capitalized his R.K. expenditures.  As early as 1977                          
            Laney capitalized his expenditures for rental of certain computer                         
            equipment used exclusively for foundation planning for R.K.                               

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