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Tharp--14.5 percent, Charles Tharp--29 percent, Claudia Keith--9
percent, Claud Tharp--33 percent, and the Estate of Glenda
Tharp--14.5 percent; (3) capital and profit interests in the
Tharp Family Partnership were owned, as follows: William Tharp--
10 percent, Charles Tharp--10 percent, Claudia Keith--10 percent,
and each child of William, Charles, and Claudia owned a 10-
percent interest, accounting for the remaining 70 percent; (4)
capital and profit interests in the Tharp Farms Partnership were
owned as follows: William Tharp--30 percent, Charles Tharp--30
percent, Claudia Keith--20 percent, Claud Tharp--20 percent; and
(5) capital and profit interests in the Tharp Enterprises
Partnership were owned as follows: William Tharp--25 percent,
Charles Tharp--25 percent, Claudia Keith--25 percent, and Claud
Tharp--25 percent. The various interests of petitioner’s
shareholders and of other family members in the entities to which
indirect loans were made are reflected in a chart attached to
this opinion as an appendix.
The following interest-free loans were made by petitioner
directly to shareholders:
Demand Note
Borrower Dated Amount
Charles Tharp Aug. 31, 1994 $29,978.74
William Tharp Aug. 31, 1994 11,100.00
William Tharp Aug. 31, 1994 28,113.21
Respondent’s agent computed interest at the applicable Federal
rate on the loans directly to shareholders in the aggregate
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