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receivable, and liquor inventory. Only the liquor license and
liquor inventory are shown to have a value, $100,000 and $1,000,
respectively.1
Culnen & Hamilton, Inc.
During the years in issue, Culnen & Hamilton, Inc. (Culnen &
Hamilton) was an insurance producer licensed by the State of New
Jersey. During those years, petitioner was the sole shareholder
of Culnen & Hamilton. Culnen & Hamilton made its return of
income on the basis of a fiscal year ending on January 31. From
February 1, 1986, through May 31, 1987, Culnen & Hamilton was an
S corporation; after May 31, 1987, Culnen & Hamilton was a
C corporation. See sec. 1361(a)(2).
Wedgewood’s Payments
On 46 occasions, from April 1987 through January 1990,
Culnen & Hamilton made payments by check and, on one of those
occasions, by wire transfer to Wedgewood (without distinction,
the 46 checks), in amounts totaling $4,034,017.41.2 The
1 The record is unclear with regard to the total value of
the liquor license and liquor inventory. While they were the
only assets listed as having value, the statement of assets
listed the total value of assets as $110,000 (not $101,000).
2 The amounts for each year are as follows:
Year Amount
1987 $1,968,000.00
1988 1,691,537.36
1989 368,410.05
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