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$54,848 for 1976 and would be due $12,095 for 1977. By letter
dated November 21, 1978, Weaver informed Kanter of the proposed
changes in the Hyatt arrangement. The letter indicated that
Weaver would call Kanter to discuss the proposed change. In a
letter to Hyatt Corp. dated November 30, 1978, Weaver stated that
the KWJ Corp. contract would not be affected by any modifications
to Hyatt Corp.'s Embarcadero Hotel contract. On December 12,
1978, Hyatt Corp. paid KWJ Corp. $60,739 for 1977.
In February 1979, Hyatt Corp. had become a privately owned
entity. By letter dated September 27, 1979, Kanter informed
Weaver that Kanter wanted to proceed with the purchase of the KWJ
Corp. stock, effective retroactively to November 1, 1978. IRA
purchased 100 percent of KWJ Corp.'s outstanding shares of stock
from Weaver. IRA was to pay $10,000 of the purchase price in
November 1979 and the balance by August 1980.
As a result of IRA's purchase of the KWJ Corp. stock, KWJ
Corp. was included as a subsidiary on IRA's 1979 consolidated
return. The 1979 consolidated return reported KWJ Corp.'s 1979
gross receipts of $171,027 and payment of the 30 percent fee to
Weaver of $51,308. The 1979 consolidated return reflected KWJ
Corp.'s assets, liabilities, and net worth as of January 1, 1979,
as follows:
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