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chloride and magnesium silicate divisions to form Dallas Group of
America, Inc. (DGA), the stock of which petitioner received in
exchange for his interest in Reagent. DGA manufactures and
distributes ammonium chloride and synthetic magnesium silicate.
Its headquarters is in Whitehouse, New Jersey. It is an S
corporation for Federal income tax purposes.
DGA had nonoperating assets including 79 percent of Trenton
Liberty Insurance Co.,2 Unity Bankcorp, Inc. stock, land in New
Jersey, and split-dollar insurance receivables in 1999 and 2000.
3. Ammonium Chloride and Magnesium Silicate Production
In the mid-1990s, DGA sold ammonium chloride to about 130
different distributors in volumes of at least one truckload.
Ammonium chloride is used as an ingredient in fertilizer, cattle
feed, cough medicine, and intravenous solutions, and in personal
products such as cosmetics and shampoo. It is also used in
galvanizing metal, producing dry cell batteries, growing baker’s
yeast, and servicing oil wells. As of September 1999, DGA
supplied about 90 percent of the ammonium chloride used in the
United States and Canada, or 18,000 tons per year, and exported
about 5,000 tons per year. About 29 percent of DGA’s gross
revenue from 1998 to 2000 was from sales of ammonium chloride.
2 Trenton Liberty Insurance Co. was formed to provide
product liability insurance for DGA.
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