Wagner Construction, Inc. - Page 67

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          $635,000) plus the $243,132 retained earnings equals $707,897.              
          That amount is less than the fair return and is a nondeductible             
          dividend.                                                                   
               We hold that petitioner may deduct $635,000 ($385,000 paid             
          to Dennis plus $250,000 paid to Curtis) as officer compensation             
          in each of the taxable years ending October 31, 1995 and 1996.              


                                                  Decision will be entered            
                                             under Rule 155.                          

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