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We note that petitioner included only one-half of the elective
deferrals in "Annual Additions" for the year ended July 31, 1987,
since petitioner asserts the elective deferrals are employee
contributions and not employer contributions. We also note that
petitioner computed the section 415 limit for the year ended July
31, 1988, based only on the commissions ($68,000 � 25 percent).
For the year ended July 31, 1987, however, petitioner based the
section 415 limit on both the commissions and elective deferrals
($90,000 � 25 percent).
Respondent contends that the commissions petitioner paid to
Robert and Charlene Peers did not constitute "participant's
compensation" for purposes of section 415. Furthermore,
respondent asserts that elective salary deferrals constitute
employer, not employee, contributions and thus, cannot be
included in "participant's compensation" for purposes of
calculating section 415 limitations. Consequently, respondent
contends that the limits of section 415(c)(1) were exceeded, and
the ESOP and trust were not qualified during the years at issue.
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