- 3 -
for payments in reimbursement of Crocus’s direct expenses of
operating such shows. We hold that petitioner is entitled to
deduct as additional business expenses the amounts of exhibition
fees paid to Crocus by exhibitors located in the former Soviet
Union and retained by Crocus as compensation for its services in
operating the foreign trade shows.
Factual Background
In October 1990, Comtek Expositions, Inc. (petitioner), was
incorporated in Connecticut and commenced business. At all
relevant times, petitioner has been a C corporation. At the time
petitioner filed the petition in this case, its principal place
of business was in Wilton, Connecticut. During the taxable
periods at issue, petitioner used the accrual method of
accounting.
During the taxable periods at issue, petitioner’s
stockholders and their respective ownership interests were as
follows:
Ownership
Stockholder Percentage
Aras Agalarov (Agalarov) 33.33
Leonid Pollak (Pollak) 26.67
Michael Tseytin (Tseytin) 26.67
Boris Kogan (Kogan) 13.33
The stockholders are parties to a stockholders’ agreement
(the stockholders’ agreement), which recites that petitioner has
issued and outstanding 200 shares of corporate stock held by the
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011