- 16 -
the Ashland Building's third floor living quarters from August
1996 to date. This fact is relevant to the extent it sheds light
on petitioners' intent to use the Ashland Building as a personal
residence during the years in issue. Therefore, we find that the
nature of the improvements indicates that the Ashland Building
was built, in part, for petitioners' personal benefit.6 Cf.
Weigel v. Commissioner, T.C. Memo. 1996-485 (improvements made to
obtain necessary rezoning for business).
Second, the record is replete with evidence that
corporations other than GRC utilized the Ashland Building as
their principal place of business during the years in issue, and
petitioners have failed to show that they were not benefited
directly from this use. Documents generated by Huntersfield show
its principal place of business as the Ashland Building. For
example, Huntersfield issued invoices to Hi-Tek Chemical Corp.7
(Hi-Tek) in late 1988 and early 1989 showing accounts receivables
of $7,004, $860, $250, $660, $431, and $323 for work done on "the
farm". The invoices identify both Huntersfield's and Hi-Tek's
address as Rd 1, Box 70, Prattsville, NY 12468, the Ashland
6 We recognize that part of the Ashland Building is suitable
for industrial usage. However, we have no basis for apportioning
the construction expenditures.
7 Hi-Tek, incorporated on Jan. 28, 1980, is the manufacturer
of an antifouling coating system used in conjunction with marine
and fresh water fouling problems. Mr. Spera was originally its
sole shareholder; since 1990, he and Joseph M. Wentzell are each
50-percent shareholders in Hi-Tek.
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011