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thus, the value of the Schnitzer-PMS stock. Hence the gain was
attributable to their services. IRA held the profits for the
benefit of Ballard, Lisle, and Kanter until it distributed the
funds to them through Carlco, TMT, and BWK, Inc. The record is
replete with examples of interests that were owned initially by
Kanter or an entity and then later declared to have been held by
Kanter or the entity as "nominee" for someone else. Thus, we
hold that the gain on the sale of the stock is properly taxable
to Kanter, Ballard, and Lisle.
The use of numerous corporations was to facilitate the
concealment of the payments, and such use was further motivated
by the tax benefits to be derived therefrom and for no sound
business purpose.
We conclude that the transactions at issue are classic
situations for the application of the assignment of income
doctrine articulated in Lucas v. Earl, 281 U.S. 111, 115 (1930),
and its progeny. The amounts received by the corporations were
for services rendered by petitioners to the Five and should be
includable in their income under section 61. See United States
v. Basye, 410 U.S. 441, 450 (1973).
3. Section 482
Finally, even if the corporations had been viable entities,
we do not think respondent's reallocation under section 482 was
unreasonable, arbitrary, or capricious.
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