- 65 -
negotiation between the two warring brothers.57 Under these
circumstances, this is the best indication of the intent of the
parties and the value of the use of the property at that time.
Helba v. Commissioner, 87 T.C. 983 (1986), affd. without
published opinion 860 F.2d 1075 (3d Cir. 1988); see Zirker v.
Commissioner, 87 T.C. 970 (1986). Furthermore, the “excess rent”
ERG paid pooled money in NPI, which as we later discuss, was used
for the Benson family’s economic benefit. Accordingly, we find
and hold that Burton had constructive dividend income of $40,067,
$46,560, and $63,444 in 1990, 1993, and 1994, respectively.
8. ERG Payments to NPI for Rent on Lowell Plant
In the unbundling agreement the brothers agreed to enter
into an 8-year lease with respect to the Lowell plant, which was
to provide that Glendon would pay NPI $2,000 per month. In 1988,
a confirming commercial lease was prepared but not executed.
This lease agreement was for a term of 8 years to commence in
March 1988 and provided for a rental payment by “Acker [sic]
Industries, Inc.” of $2,000 per month.
During the years at issue, neither Glendon nor Aker paid
rent to NPI for use of the Lowell plant.58 Instead, ERG paid
57Respondent requested the Court to find that the unbundling
agreement was “the result of intense arm’s-length bargaining”.
Petitioners failed to object to this requested finding.
58Glendon explained why he failed to pay rent:
(continued...)
Page: Previous 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 NextLast modified: May 25, 2011