- 9 - designate Daryl Kell to perform the editing services.5 In the 1997 taxable year $214,106 was received by petitioner for the editing services of Daryl Kell on the pictures Kazaam, The Associate, Breakdown, and Moll Flanders. The deal memoranda for these pictures also specifically designate Daryl Kell to perform the editing services.6 In the 1996 and 1997 taxable years Daryl Kell, the individual designated to perform the services for petitioner, owned more than 25 percent of the shares in petitioner. Therefore, we find that the income received from the enumerated motion picture contracts was personal holding company income. See Kenyatta Corp. v. Commissioner, supra at 184 (and cases cited therein). 5 The deal memorandum for Fair Game provides: “EMPLOYER [Petitioner] hereby lends to PRODUCER [Warner Bros.] the exclusive services of EMPLOYEE [Daryl Kell]”. The deal memorandum for Moll Flanders provides: “Daryl Kell will provide music editing services for O’Trilogy Productions”. Additionally the Executive Vice President-Post production of Warner Bros. testified that Daryl Kell was the only person to perform the required services under the loan-out agreement. 6 The deal memorandum for Kazaam provides: “Daryl B. Kell/Calypso Music Inc. will provide music editing services for Interscope Communications * * *”; “Daryl Kell will render music editorial services”. The deal memorandum for The Associate provides: “Daryl B. Kell/Calypso Music Inc. will provide music editing services for Interscope Communications * * *”; “Daryl Kell will render music editorial services”. The deal memorandum for Breakdown provides: “Daryl Kell (Editor) Calypso Music, Inc. (Lender) will provide music editing services to Dino DeLaurentiis Co. (Producer)”; “Editor [Daryl Kell] will render music editorial services”. The deal memorandum for Moll Flanders provides: “Daryl Kell will provide music editing services for O’Trilogy Productions”.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011