- 4 -
shareholder of Mary Catherine from its incorporation through
1991, the final year in issue. Petitioner is also the only
shareholder of Deanne Lynn Realty Co. (Deanne Lynn), another S
corporation.
Since 1986, the business formerly conducted exclusively by
Derekseth has been divided as follows among petitioner's three
corporations. Mary Catherine acquires land; obtains zoning,
wetlands, and subdivision approvals; improves the land by
clearing vegetation, building roads, installing utilities, and
subdividing the land into lots; and then sells the subdivided
lots to residential builders, including Derekseth. Derekseth
purchases lots from Mary Catherine and other developers and
builds houses on them. As agent for Derekseth, Deanne Lynn then
sells the houses and lots, generally to individuals. After Mary
Catherine was formed, Derekseth transferred to Mary Catherine by
quitclaim deed its holdings of raw land and building lots.
During 1987, Mary Catherine acquired 869 acres of land (the
Ridge) in East Granby, Connecticut. Some of the Ridge was
purchased by Mary Catherine directly; the rest was transferred to
Mary Catherine by Derekseth and petitioner. During 1988
Derekseth assigned to Mary Catherine by quitclaim deed 140 acres
of land (Minnechaug) in Glastonbury, Connecticut.
Commencing in 1989, the real estate market in Connecticut
became depressed. The numbers of sales and sale prices of
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