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No Lakewood employee covered by the Lakewood Plan, if he or
she had died, would ever have received a death benefit equal to
2.5 times or 8.15 times his or her prior-year compensation. Each
of Lakewood’s employee/owners decided the amount that Lakewood
would contribute to the SC VEBA on his or her behalf, and
Lakewood wrote separate checks for each employee/owner’s
contribution, noting on the check the name of the person for whom
the contribution was made.
On its Federal corporate income tax return for its taxable
year ended October 31, 1991, Lakewood claimed a $480,901.49
deduction for VEBA contributions made to the Lakewood Plan for
the following persons’ benefits:
Trustee’s fees........ $1,000.00
Dr. Hirshkowitz.......254,051.49
Dr. Desai.............122,750.00
Dr. Sobo.............. 83,100.00
Dr. McManus........... 20,000.00
480,901.49
On its 1992 Federal corporate income tax return, Lakewood
claimed a $209,869.03 deduction for VEBA contributions made for
the following persons’ benefits:
Dr. Hirshkowitz......$136,678.43
Dr. Desai............ 42,056.44
Dr. Sobo............. 13,213.52
Dr. McManus.......... 17,920.64
209,869.03
This deduction consists of contributions to the Lakewood Plan and
$70,000 that Lakewood paid directly to Peoples Security for C-
group term policies purchased outside of the Lakewood Plan for
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