- 35 -
never exceeded $3.43 million during those years suggests that
more than half of the potential benefit may have been derived by
Rentals.
Petitioner cites Owensby & Kritikos, Inc. v. Commissioner,
819 F.2d 1315, 1325 n.33 (5th Cir. 1987), affg. T.C. Memo. 1985-
267, and R.J. Nicoll Co. v. Commissioner, 59 T.C. at 51, in
support of its view that Mrs. Harrison’s personal guaranties were
an important factor in demonstrating the reasonableness of the
compensation paid to her during the audit years. Those cases are
representative of a line of cases (the no-fee cases) in which
courts, including this Court, have cited employee-shareholder
loan guaranties in support of findings that all or a portion of
amounts paid to such individuals constituted deductible
compensation. See, e.g., Owensby & Kritikos, Inc. v.
Commissioner, supra at 1325 n.33 (stating that loan guaranties by
key employee-shareholders weigh “in favor of munificent
compensation”); Leonard Pipeline Contractors, Ltd. v.
Commissioner, T.C. Memo. 1998-315 (noting that an “indispensable”
employee-shareholder’s personal guaranty of a $1.5 million bank
loan was “crucial” to a large project), affd. 210 F.3d 384 (9th
Cir. 2000); Ledford Constr. Co. v. Commissioner, T.C. Memo. 1977-
204 (giving “some consideration” to the chief executive’s
personal guaranty of company debt in deciding the reasonableness
of his compensation); see also Shotmeyer v. Commissioner, T.C.
Memo. 1980-238; Adolph Hanslik Cotton Co. v. Commissioner, T.C.
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