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Year Gross Sales Taxable Income Retained Earnings
19861 $8,488,491 $68,728 $551,383
19872 1,137,298 284 551,676
19883 6,021,394 (278) 551,398
1989 4,718,087 (316,793) 238,541
1990 5,532,675 (58,153) 180,388
1991 5,882,632 (122,534) 59,654
1992 5,518,248 (75,726) (16,072)
1993 6,032,463 (69,622) (85,694)
1994 5,619,756 (201,778) (287,472)
1995 5,472,912 (49,396) (336,868)
1 Tax year Nov. 1, 1986-Oct. 31, 1987.
2 Tax year Nov. 1, 1987-Dec. 31, 1987.
3 Supermarket distribution rights and records sold to H�agen-Dazs July 22, 1988.
ULTIMATE FINDINGS OF FACT
1. The intangible assets embodied in Arnold’s oral
agreement with Mr. Mattus and personal relationships with the
supermarket owners and managers were never corporate assets of
petitioner. Until the sale to H�agen-Dazs on July 22, 1988,
Arnold was the sole owner of those assets, whose use he had
hitherto made available to petitioner. Accordingly, neither any
transfer of rights in those assets to SIC nor their sale or other
disposition to H�agen-Dazs is attributed to petitioner.
2. The fair market value of the SIC stock distributed by
petitioner to Arnold in redemption of his stock in petitioner was
$141,000.
3. Immediately after the distribution of the stock of SIC
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