Taiyo Hawaii Company, Ltd. - Page 6

                                        - 6 -                                         

          real property business activity in Hawaii.  Petitioner also                 
          received advances from its parent corporation, Seiyo, as well as            
          another related company, Taiyo Development, a Japanese                      
          corporation.  The advances received from Seiyo and Taiyo                    
          Development were reflected on petitioner's books, records, and              
          tax returns as payables to affiliates.  These advances were                 
          utilized for working capital to develop projects, to pay                    
          outstanding debts owed to financial institutions, and to exploit,           
          maintain, and hold the Ginter and Gomes properties.                         
               During the taxable year 1988, Taiyo Development made                   
          advances to petitioner which were not evidenced by promissory               
          notes or other written instruments.  Although the records in                
          which the 1988 advances were shown did not expressly reflect a              
          stated rate of interest, Seiyo had instructed petitioner to                 
          accrue interest at a certain rate on its books.                             
               At the end of the 1988, 1989, 1990, and 1991 fiscal years,             
          petitioner had outstanding bank loans with third-party banks, in            
          the aggregate amounts of $12,722,465, $15,440,132, $13,479,595,             
          and $5,548,809, respectively.  During the period under                      
          consideration, petitioner paid down several of the loans due to             
          third-party banks.  The loans were evidenced by promissory notes            
          executed by petitioner.                                                     
               During the taxable years 1989, 1990, and 1991, Seiyo and               
          Taiyo Development advanced the following amounts to petitioner:             





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