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earned a six-figure salary. Petitioners’ income (exclusive of
partnership losses) of $146,879 and $187,674 in 1982 and 1984,
respectively, shows that petitioners stood to benefit
substantially by the deductions and credits that Whitman offered.
Clothier explained to petitioner the immediate tax benefits of
the investment. The expectation of such benefits motivated
petitioner to invest in Whitman.
At trial, petitioner made a transparent attempt to downplay
his role in the success of Apex, describing his duties as
“strictly limited to production”. He described his business
aptitude by saying: “I think everybody has strengths and
weaknesses in what they do, and mine is, I’m more mechanically
inclined.” As to the source of Apex’s success, petitioner said:
“I’ve been lucky”. Petitioner also testified that he has been
diagnosed with dyslexia and that he does not enjoy reading.
Petitioner’s claim that he lacks sophistication is self-
serving and inconsistent with the facts. It is readily apparent
that petitioner completely dominates the operations of Apex and
is responsible for its remarkable success. His alleged choice to
devote his efforts to the production operations of Apex as well
as his aversion to reading are not inconsistent with his
possessing business acumen. We note that petitioner acquired
equipment in the name of Lake Stevens Leasing, which he described
as a d/b/a for himself, that leased equipment to Apex.
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