- 6 -
After further concessions,3 the issues for decision are:
(1) Whether petitioner Menard, Inc. (Menards), is entitled
to deduct $20,642,485, the total compensation paid to petitioner
John R. Menard (Mr. Menard), or some lesser amount, as officer’s
compensation for the taxable year ending January 31, 1998 (TYE
1998);
(2) whether Menards is entitled to claim deductions under
section 162 of $6,563,548 for the payment of Team Menard, Inc.
(TMI), salaries and expenses during TYE 1998;
(3) whether Menards’s payment of TMI’s salaries and expenses
during the calendar year 1998 of $5,703,251 constituted a
constructive dividend to Mr. Menard for 1998;
(4) whether interest of $639,302 that accrued during 1998 on
loans from Mr. Menard to Menards, but that was paid to and
reported by Mr. Menard in 1999, constituted interest income
constructively received in 1998; and
3In Menards’s notice of deficiency, respondent determined
that (1) Menards was not entitled to a depreciation deduction of
$20,213 with respect to the grading of land, and (2) Menards was
not entitled to a deduction of $187,218 with respect to legal and
professional fees incurred in the development or improvement of
property. In the stipulation of facts, respondent conceded that
Menards properly capitalized $129,129 of the legal and
professional fees. On brief, petitioner conceded both issues.
Respondent also proposed adjustments to Mr. Menard’s
itemized deductions. The parties agree that this issue is
computational.
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