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Assets
Cash $40,626
Accrued income 108,521
Total assets 149,147
Liabilities
Mortgages, notes,
and bonds payable 19,400
Accrued expenses 14,663
Total liabilities 34,063
Net Worth 115,084
Common Stock 1,000
Retained earning
unappropriated 53,968
Previously taxed income 60,116
Total stockholder equity 115,084
The commissions paid over by Hyatt Corp. attributable to
operations from 1978 through 1982 were as follows:
Operating Year Payment Year Payment
1978 1979 --
1979 1980 $171,027
1980 1981 128,671
1981 1982 246,717
1982 1983 245,843
Except for the $171,027 payment received in 1980 from
operations of the Hyatt hotel during 1979 that it reported on its
1979 return, IRA included the payments as income on the returns
for the years of payment.
Hyatt Corp. was not informed about the sale of the KWJ Corp.
stock to IRA and, therefore, continued to send the payments to
Weaver, who then sent the check to IRA. IRA then paid Weaver his
30 percent and deducted the payments as a commission expense.
A letter dated March 29, 1983, from Weaver to Kanter states:
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