Dexsil Corporation - Page 10




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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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