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FYE Aug. 31 Deficiency
1990 $173,346
1991 226,072
1992 326,591
The issue for decision is whether the compensation paid to
petitioner's majority shareholder in its fiscal years ending
1990, 1991, and 1992 is deductible by petitioner as reasonable
compensation under section 162(a)(1). We hold that it is to the
extent stated herein.
All section references are to the Internal Revenue Code in
effect for the years in issue, and all Rule references are to the
Tax Court Rules of Practice and Procedure, unless otherwise
indicated.
FINDINGS OF FACT
We incorporate by reference the stipulation of facts and
attached exhibits. Tricon Metals & Services, Inc. (petitioner),
is an Alabama corporation whose principal place of business was
Jefferson County, Alabama, when the petition was filed.
Petitioner operates on a fiscal year ending August 31.
1. Petitioner
Petitioner buys, warehouses, and sells high-strength steel
products. Petitioner's founders, James L. Bell (Bell), Walter H.
Ferguson (Ferguson), and W. Warren Wood (Wood), worked as
salesmen for other companies in the steel business prior to
organizing petitioner.
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