Investment Research Associates - Page 302




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          did not know who possessed the books and records.  When                      
          respondent served a subpoena on Kanter for records of BRT, Kanter            
          produced various tax returns but did not produce requested                   
          records related to the basis of assets.  Weisgal testified that              
          he had a 3-year retention policy except that records related to              
          basis were kept until the applicable asset was sold.  However,               
          neither Kanter nor Weisgal produced records related to basis that            
          were sought by respondent even though, under Weisgal's stated                
          policy, such records should have been available.  The fact that              
          Weisgal did not maintain the books and records of BRT and the                
          fact that Kanter, rather than Weisgal, produced records is also              
          indicative of Kanter's control over BRT.                                     
               Kanter received loans from BRT.  He owed $287,030 and                   
          $1,311,430 to BRT in 1987 and 1989, respectively.  Kanter did not            
          establish that these loans were for adequate consideration, that             
          the loans were adequately secured or that the loans were ever                
          repaid.  He also indirectly borrowed money from BRT by borrowing             
          money from IRA and Holding Co., the stock of which corporations              
          was in whole or in part owned by BRT.                                        
               Section 674(a) provides that the grantor of a trust will be             
          treated as the owner of any portion of the trust whose income,               
          without the approval of an adverse party, is subject to a power              
          of disposition, exercisable by the grantor or a nonadverse party,            
          or both, without the approval or consent of any adverse party.               






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