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reported to his father, Lynn. We concluded that T.D. Lynn's
compensation was reasonable, and we took his duties into account
when we determined the amount of reasonable compensation for the
other officers. Respondent's expert, David J. Bowering, also
took those factors into account in multiplying the compensation
paid to the Daedalus CEO by 150 percent, and we took the multiple
roles into account in determining reasonable compensation for
Lynn. We do not agree with petitioner that the salaries of two
separate officers should be both combined and doubled, because to
do so would be to duplicate the adjustment that we previously
made.
Petitioner refers to losses sustained by Daedalus in earlier
years in support of its argument. Petitioner, however, also had
meager and loss years. We recognized in our prior opinion and
recognize now the contributions that Lynn made to the success of
petitioner. As the court stated in Owensby & Kritikos, Inc. v.
Commissioner, 819 F.2d 1315, 1325 (5th Cir. 1987), affg. T.C.
Memo. 1985-869, "limits to reasonable compensation exist even for
the most valuable employees." Upon our review of the entire
record and with careful consideration of the opinion of the Court
of Appeals, we believe that we made the appropriate allowances on
the evidence in this case.
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