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In January 1984, Carlco, TMT, and BWK each issued 150
additional shares of preferred stock for $150. Carlco issued the
additional preferred shares to the Christie Trust, TMT issued the
additional preferred shares to the Orient Trust, and BWK issued
the additional preferred shares to the BK Children's Trust. As a
result of those trusts' ownership of these preferred shares,
Carlco, TMT, and BWK, Inc., no longer qualified as members of
IRA's consolidated group of corporations and were not included in
the consolidated tax returns IRA filed.
b. Control and Management of Carlco, TMT, and BWK, Inc.
Kanter directed Freeman (IRA's president) to distribute
funds received by IRA related to Prudential transactions in the
ratio of 45 percent to Carlco, 45 percent to TMT, and 10 percent
to BWK. From 1984 through 1989, IRA generally transferred funds
and other assets to Carlco, TMT, and BWK, Inc., in the respective
45-45-10 allocation ratio Kanter had directed.
Lisle managed and controlled Carlco's investments. Lisle
and members of his family, including his wife Donna Lisle and his
son Thomas Lisle, had signatory authority over Carlco's accounts.
In 1982 Kanter, his brother Carl Kanter, and Meyers were the
officers and/or directors of Carlco. In 1983, Meyers and Freeman
were the directors, president, and treasurer, and Gallenberger
was secretary. From 1984 through 1989, there were no directors
listed; Lisle, his brother Henry Lisle, his son Thomas Lisle, and
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