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for the benefit of members of the taxpayer's family on the ground
the taxpayer was deemed to own the shares held by the
beneficiaries of the trust under section 267).
With respect to the loss claimed on the sale of IRA's note
receivable from Funding Systems, IRA's adjusting journal entries
and Kanter's testimony indicate that this note receivable was
sold by IRA to Holding Co. IRA failed to establish that IRA and
Holding Co. were not members of the same controlled group within
the meaning of section 267(b)(3), and, therefore, the claimed
loss is not allowable. See sec. 267(a) and (b)(3). In fact, the
evidence shows that IRA and Holding Co. were members of the same
controlled group within the meaning of section 267(b)(3).
As previously stated, IRA was owned by BRT, the
beneficiaries of which were members of Kanter's family. The
corporate minutes of Holding Co. show that the shareholders of
Holding Co. were Kanter, BRT, and various other trusts. Kanter
was at times president of Holding Co. Holding Co. was a client
of Principal Services.
Kanter directed moneys and other personal service income
(such as trustee fees earned by him as trustee of the Hi-Chicago
Trust) to Holding Co. The facts show that, like IRA, Holding Co.
was owned by members of Kanter's family and that, under the rules
of attribution set forth in section 1563(d) and (e), the same
five or fewer persons owned 50 percent or more of IRA and Holding
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