Investment Research Associates - Page 330




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          adjustments that were then being heard by the Court.  Counsel for            
          respondent expressed no disagreement with that assertion.                    
          Following the colloquy between counsel for the parties and the               
          Court, the trial resumed with respect to the remaining issues as             
          to which the parties were unable to agree:  (1) Whether payment              
          of the subject expenses out of the Administration Co. special E              
          and Principal Services special accounts represented payment by               
          Kanter, and (2) whether the Kanters were entitled to a deduction             
          for mortgage interest payments made with respect to property (the            
          Kanters' personal residence) that was titled in a grantor trust              
          of which Kanter was the deemed owner.                                        
               Respondent also conceded that Kanter's Schedule C expenses              
          were ordinary and necessary to his business.                                 
               The Kanters claimed that the Schedule A and Schedule C                  
          deductions and expenses disallowed by respondent for the years               
          1986 through 1989 were paid with Kanter's funds.                             
               The Kanters are entitled to mortgage interest and real                  
          estate taxes paid on their personal residence titled in Egondale             
          Trust, which was Kanter's grantor trust.                                     
                                       OPINION                                         
               On brief, respondent attempted to retract oral stipulations             
          made on the record that, for purposes of deciding respondent's               
          disallowed Schedule A and C deductions and expenses for the years            
          involved, this Court need only decide whether the funds used to              






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