- 341 -
during those years, pursuant to the carried interest, were
taxable to him. Respondent contends that Kanter reported trustee
fees in 1988 and 1989 in a belated attempt to lend credence to
his position that the carried interest payments were independent
of any trustee fees in order to counter respondent's
determination for prior years that the carried interest payments
from HCT to Holding Co. were in substance compensation for his
services as trustee. We agree.
On the HCT fiduciary returns for the taxable years ended
February 28, 1981, 1982, 1983, and 1984, the deductions for the
carried interest payments from HCT to Holding Co. are labeled
"Fiduciary Fees", "Participation Fee", "Commissions", and
"Commission Expense", respectively. These HCT fiduciary returns
are all signed by Kanter in his capacity as trustee of HCT. The
fact that the deduction for the payment from HCT to Holding Co.
for the taxable year ended February 28, 1981, was labeled
"Fiduciary Fees" and that the deductions labeled "Participation
Fee", "Commissions", and "Commission Expense" for the subsequent
3 years were also for the carried interest payments from HCT to
Holding Co. is further evidence that the carried interest
payments from HCT to Holding Co. were in fact fiduciary fees for
services rendered by Kanter. The fact that the payments are
labeled "Participation Fee", "Commissions", and "Commissioner
Expense", is, in any event, evidence that the payments were made
Page: Previous 331 332 333 334 335 336 337 338 339 340 341 342 343 344 345 346 347 348 349 350 NextLast modified: May 25, 2011