Beiner, Inc. - Page 7

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          improved cashflow in that petitioner typically paid for its                 
          purchases within 10 days while the OEM usually had to wait at               
          least 45 days to be paid on its sale of a finished product.  The            
          three OEMs were regularly asked by other persons to sell surplus            
          parts to them, but the OEMs always turned these requests down.              
          The three OEMs would have stopped selling their surplus parts to            
          petitioner had Beiner become disaffiliated with it.                         
          B.  Related Business                                                        
               In 1997, Beiner and his brother incorporated California                
          Controls, Inc. (California Controls), whose business is the same            
          as petitioner’s except that the parts that each sells are made by           
          a different manufacturer.  Beiner and his brother own California            
          Controls equally, and they share equally in making its business             
          decisions.  During the subject years, Beiner worked for                     
          California Controls approximately 19 hours a week, and it                   
          compensated him for that work.                                              
          C.  Beiner’s Background and His Management of Petitioner                    
               Beiner was an electrical designer for 27 years before he and           
          his brother incorporated petitioner.  In that capacity, Beiner,             
          either solely or with others, designed electrical systems for               
          high-rise office buildings, large hotels, shopping centers, and             
          numerous residential and commercial projects.  Beiner’s salary at           
          the end of his career as an electrical designer was $90,000 to              
          $100,000 a year.                                                            






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Last modified: May 25, 2011