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Memo. 1978-394; Allison Corp. v. Commissioner, T.C. Memo. 1977-
166. In each of those cases, and in R.J. Nicoll Co. v.
Commissioner, 59 T.C. 37 (1972), cited by petitioner, the Court
simply listed a key employee-shareholder’s personal guaranty of
corporate employer debt as one of several positive contributions
by the employee to the corporate employer. All of those no-fee
cases involve a key employee, usually the person (or one of the
persons) most responsible for the success of the corporate
employer. No specific compensatory amount is attributed to the
guaranty, and in none of the cases is it certain that the Court
would have reached a different result in the absence of the
guaranty.5 Moreover, in Owensby & Kritikos, Inc. v.
Commissioner, supra, the Court of Appeals for the Fifth Circuit
hedged its comment regarding the relevance of the loan guaranties
by noting that “[t]he record is unclear * * * as to the amount or
riskiness of these loans”, an allusion to factor (1) in the
guaranty fee cases.
Mrs. Harrison’s loan guaranties represented one of her
principal contributions to petitioner. They did not, as in the
5 In Adolph Hanslik Cotton Co. v. Commissioner, T.C. Memo.
1978-394, the Commissioner argued that an amount paid for the
guaranty of a line of credit is not “compensation for personal
services actually rendered” within the meaning of sec. 162(a)(1)
and, therefore, may not be considered in finding the amount that
constitutes “reasonable” compensation. We declined to address
that argument on the ground that “[o]ur finding would be the same
regardless of whether guarantying such obligations may properly
be considered.” Id. at n.14.
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