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consideration paid for the rights as between Arnold and SIC.12
Ms. Bronner also signed the Assignment of Rights on behalf of
H�agen-Dazs. Arnold signed a “Consulting and Non-Competition
Agreement” with H�agen-Dazs, for which he was to be paid $150,000
annually for a period of 3 years. Martin also signed a
“Consulting and Non-Competition Agreement” with H�agen-Dazs, for
which he was to be paid $50,000 annually for a period of 5 years.
Finally, H�agen-Dazs entered into three nonexclusive distribution
agreements with petitioner for its continued distribution of
H�agen-Dazs ice cream products to specified small independent
stores and food service accounts in a limited geographical area.
On March 3, 1989, petitioner filed a Form 1120S for 1988,
reporting gross sales of $6,021,394 and an ordinary loss of $278.
Rudolph Bergwerk signed the return as preparer. MIC’s 1988 Form
1120S contained no reference to the creation of SIC, the transfer
to it of assets, or their basis, or the distribution of SIC stock
to Arnold in redemption of his stock in MIC. Nor did the return
refer to SIC’s and Arnold’s subsequent sale of assets to H�agen-
12 Subsequent to trial, respondent submitted to the Court a
facsimile of the face of a H�agen-Dazs check to SIC in the amount
of $1,430,340, accompanied by an affidavit that H�agen-Dazs
issued the check to SIC as payment due at the closing of the sale
of assets purportedly sold by SIC to H�agen-Dazs. We do not
admit the facsimile and affidavit into evidence; there is
sufficient evidence in the record to support a finding that SIC
received the entire payment from H�agen-Dazs. However, because
we decide this case as we do, initial receipt of payment by SIC
instead of Arnold does not determine the Federal tax treatment to
petitioner of the transactions at issue.
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