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program of annual gifting of Dart shares to their children and to
irrevocable trusts for the benefit of the children. Petitioners
reported taxable gifts in excess of $5.5 million for taxable
years 1992, 1993, and 1994 and paid approximately $2 million in
gift taxes.
In 1982, Mr. Oren established a second truckload carrier
company in Texas called Fleetline, Inc. (Fleetline). This
company performed services similar to those of Dart. Fleetline’s
stock was owned entirely by Mr. Oren.
Highway Leasing (HL) was incorporated in 1987 as a Minnesota
corporation. All the stock of HL was owned by Mr. Oren. Mr.
Oren served as the president/treasurer of HL, and Mrs. Oren
served as secretary. Mr. Oren was the only director of HL. HL
was in the business of acquiring and leasing trailers. HL leased
the trailers to Dart, Fleetline, and other parties. The
following table details some of the business operations of HL for
1993, 1994, and 1995:
Item
Ordinary
Year Revenues Net Income Income Trailers
1993 $6,295,000 $965,237 $(2,845,625)2,068
1994 8,587,000 635,746 (4,459,488) 2,550
1995 10,919,000 2,447,233 (6,825,523) 3,847
HL elected to be taxed as an S corporation for taxable years
1993, 1994, and 1995.
Highway Sales (HS) was incorporated in 1971 as a Minnesota
corporation. All the stock of HS was owned by Mr. Oren. Mr.
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