- 9 - investor would have been quite satisfied with petitioner’s consistent growth, solid management, and other indications that gains would continue. Respondent contends that petitioner’s accountant performed yearend planning “to severely limit petitioner’s taxable income”. The bonus calculations were performed at yearend because it was then that petitioner’s accountant had all the information required to determine the appropriate amount of the payments. Our focus is on the reasonableness of the amounts, not the payment dates, of the compensation. The timing of the payments does not lead us to conclude that Mr. Damron’s compensation was unreasonably high. See Owensby & Kritikos, Inc. v. Commissioner, 819 F.2d 1315, 1323, 1329 (5th Cir. 1987) (stating that “No single factor is decisive of the question * * * [although] such substantial bonuses declared at year-end when the earnings of a business are known usually indicate the existence of disguised dividends”), affg. T.C. Memo. 1985-267. Respondent also contends that the amounts he allowed are “in line with” Mr. Damron’s compensation as an LKQ employee. All the evidence presented at trial, however, established that Mr. Damron’s responsibilities to LKQ were fewer, less stressful, and less time-consuming than his previous work for petitioner. In short, LKQ paid Mr. Damron less than petitioner paid because at LKQ he delegated more of his responsibilities.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
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