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the carried interest) during the years 1982 and 1983, and/or
whether he reported any such fees on his returns for those years.
The fact that Kanter did not receive any trustee fees from HCT
(other than the carried interest) is affirmatively shown by the
HCT fiduciary income tax returns for the taxable years ended
February 28, 1982, and 1983. On those HCT returns, other than
the deduction for the carried interest payments to Holding Co.,
HCT deducted no other payments as fiduciary fees. Had HCT made
any other payment for fiduciary fees, HCT presumably would have
deducted them on its returns. Therefore, the fact that HCT
deducted no other payments as fiduciary fees for those taxable
years indicates that HCT paid no other fiduciary fees to Kanter
during those years. Except for trustee fees of $29,000 for 1988
and $3,000 for 1989, Kanter did not establish that he received or
reported on his tax returns any trustee fees from HCT (other than
the carried interest) from the inception of HCT in 1972 through
1989. In our opinion the evidence shows that the carried
interest payments were in fact compensation for Kanter's services
as trustee of HCT.
With respect to the trustee fees from HCT that Kanter
reported as income on his 1988 and 1989 returns, at the time
Kanter received those fees, he knew that respondent had
previously determined in notices of deficiency for the taxable
years 1981 and 1982 that the amounts paid by HCT to Holding Co.
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