Wagner Construction, Inc. - Page 19




                                       - 19 -                                         
                    Return                             Financial Statement            
                                   Total Officer       Total Officer                  
          Year      Dennis      Curtis    Compensation    Compensation                
          1986     $134,310    $60,690      $195,000   $195,000                       
          1987       40,641     40,641        81,282        81,282                    
          1988       74,206     51,706       125,912        285,912                   
          1989      160,456     80,456       240,912        243,090                   
          1990      207,239     97,239       304,478        304,478                   
          1991      745,050    345,050     1,090,100        930,100                   
          1992      593,350    193,350       786,700        788,400                   
          1993      784,470    204,450       988,920        988,920                   
          1994      847,109    399,260     1,246,369        1,246,437                 
          1995    1,048,200    246,688     1,294,888        1,293,948                 
          1996      699,192    400,573     1,099,765        1,099,825                 
               Since its incorporation in 1985, petitioner has neither paid           
          nor declared any dividends.                                                 
               Petitioner timely filed its Forms 1120 for the taxable years           
          1995 and 1996 with the Internal Revenue Service Center at Kansas            
          City, Missouri.  On November 25, 1998, respondent issued a notice           
          of deficiency to petitioner for the taxable years ending October            
          31, 1995 and 1996.  Respondent's proposed adjustments concerned             
          only the reasonableness of petitioner's total officer                       
          compensation payments made to Dennis and Curtis.                            
                                       OPINION                                        
          A. Positions of the Parties                                                 
               On its Forms 1120, petitioner deducted officer compensation            
          of $1,294,888 ($1,048,200 for Dennis and $246,688 for Curtis) in            
          1995 and $1,099,765 ($699,192 for Dennis and $400,573 for Curtis)           
          in 1996.  Petitioner contends that the amounts paid to Dennis and           
          Curtis were reasonable and were for services they provided to               
          petitioner.                                                                 







Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011