-41-
(B) The Elyria Hall. It may be that, the determination of
the Lorain County Court of Common Pleas in the civil action is a
determination that (or, at least, evidence that) $250 is a
reasonable rental for the Elyria Hall. If it were coupled with
evidence as to the comparative location, size, and quality of
Elyria Hall and the Center, then this evidence could well provide
a basis for a finding as to the reasonableness of the $250 rental
payments for the Center. However, we have not found, and the
parties have not directed our attention to, any such connecting
bits of evidence in the record in the instant case.
Accordingly, we conclude that the record in the instant case
does not provide any basis for concluding that the $250 rental
payments for the Center were or were not in excess of a
reasonable rental. Thus petitioner has failed to carry its
burden of proving that these payments did not constitute an
inurement of petitioner’s net earnings to Zeve and Popovic during
petitioner’s fiscal 1984 and fiscal 1985.
We hold for respondent on this issue.
(5) Conclusion
As a result of our holdings as to the payments to Zerbini in
petitioner’s fiscal 1986 and the payments for the Center in
petitioner’s fiscal 1984 and 1985, we conclude that there were
inurements of petitioner’s net earnings to insiders in each of
the years in issue. Petitioner does not contend that these
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