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Furthermore, we do not agree with petitioner that a lower
commission rate is justified because petitioner did not provide
funding for the SCP deal. SCP lent money to petitioner with
which to make those advances. Petitioner was principally
responsible for repayment of those loans and for payment of the
interest due on them. We are persuaded that an unrelated party
under similar circumstances would demand a commission rate in the
higher range.
Accordingly, on the basis of the foregoing, we hold that for
the years in issue income should be reallocated to petitioner in
a manner to effect a commission rate of 11 percent of sales for
the SCP deal produce petitioner sold during those years. In
addition, for 1989 and 1990, income should be reallocated to
petitioner in the amount of any payments petitioner made to Mr.
Espinosa on behalf of the Canelos growers.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
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