- 4 -
outstanding for 7 years. Accordingly, among the three sister
corporations, advances were outstanding to petitioner for a total
of 22 annual accounting periods. Petitioner accrued and reported
interest income with respect to 8 of the 22 accounting periods.
No interest was accrued or reported with respect to 14 of the 22
annual accounting periods. The total amount of interest accrued
and reported by petitioner for the period 1984 through 1991 was
$175,662. No amount of the accrued and reported interest was
paid by the sister corporations. Instead, it was rolled over
into a note receivable each year.
The reported interest was sporadic in amount and also varied
as a percentage of the outstanding amount of advances. Treating
the cumulative advances1 outstanding annually for each sister
corporation as the denominator and the amount of reported
interest as the numerator,2 the following percentage rate of
interest would result:
1 The outstanding annual cumulative advances used take into
account increases for advances and reductions for any payments or
credits during the year.
2 No interest income was accrued or reported by petitioner
with respect to one of the three sister corporations--Cerand
Aviation
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: May 25, 2011