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unrelated business taxable income pursuant to
sec. 512(a)(1), I.R.C. P contends that it is
not engaged in such a business and that, in
any event, such payments are royalties that
are excluded from unrelated business taxable
income pursuant to sec. 512(b)(2), I.R.C.
Held: Excepting the portion of the list
rental payment that compensates the list
broker, or the list manager in its capacity
as list broker, the mailer's list rental
payment in each list rental transaction is a
royalty that is excluded from unrelated
business taxable income pursuant to sec.
512(b)(2), I.R.C. Held, further, the list
brokerage activities are not royalty-related
activities. Held, further, the list brokers
and the list manager, in its capacity as list
broker, do not act as P's agents.
Consequently, the list brokerage activities
and any compensation received by the list
brokers or the list manager, in its capacity
as list broker, are not attributable to P.
Albert G. Lauber, Jr., Milton Cerny, Lloyd H. Mayer,
Julie W. Davis, and Carl S. Kravitz, for petitioner.
Dianne I. Crosby and Bettie N. Ricca, for respondent.
WELLS, Judge: Respondent determined deficiencies in
petitioner's Federal income taxes as follows:
Year Deficiency
1991 $17,905
1992 55,009
1993 133,542
Unless otherwise indicated all section references are to the
Internal Revenue Code in effect for the years in issue, and all
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