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petitioner’s stock.2 On June 30, 1982, Dean paid $2,150 to
petitioner for 43 additional shares of its stock, and Darle’s
other brother Rocky Miller (Rocky) paid $4,650 to petitioner for
93 shares of stock. From June 30, 1982, until June 30, 2000,
petitioner was owned by the three brothers as follows:
Shareholder Percent Ownership
Darle Miller 51.8%
Dean Miller 24.1
Rocky Miller 24.1
Since its inception, petitioner’s tax year has ended June 30.
B. Petitioner’s Business
Petitioner’s primary business was interior wall
construction. Wall construction includes the placing of studs,
insulating the walls, hanging drywall and other wall materials as
required, and drywall taping (collectively, the drywall
construction business). Since the early 1990s, petitioner has
limited its geographic business area to Fargo, North Dakota, and
Moorhead, Minnesota.
Petitioner was a subcontractor. It was awarded construction
jobs from general contractors by submitting the lowest bid to
complete a specific job (a lowest bid commodity business).
Petitioner primarily bid on commercial construction projects.
After being awarded a job, petitioner purchased the supplies
2The record is devoid of an explanation why Darle paid less
than Dean for each share of petitioner’s stock.
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Last modified: May 25, 2011