PK Ventures, Inc. and Subsidiaries, et al. - Page 56

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          corporations during 1986 through 1991.  In support of this                  
          contention, petitioners argue that (1) respondent’s determination           
          in the PKV&S notice of deficiency and paragraph 51 of the                   
          Stipulation of Facts establish that a portion of the compensation           
          deducted by PKV&S on its consolidated income tax returns for 1992           
          and 1993 is attributable to deferred compensation that was paid             
          to Rose during those years and (2) Rose was insufficiently                  
          compensated for his services to PK Ventures and its subsidiaries            
          during 1986 through 1991.  As discussed below, petitioners’                 
          arguments are unpersuasive.                                                 
               Paragraph 51 of the Stipulation of Facts recites the                   
          following:                                                                  
                    51.  As is reflected in the notice of deficiency,                 
               the respondent determined that PK Ventures is entitled                 
               to a 1992 deduction for compensation for Rose in the                   
               amount of $438,055, which consists of $143,317 of                      
               then-current compensation and $294,738 of deferred                     
               compensation.  The notice of deficiency also reflects                  
               the determination of the respondent that PK Ventures is                
               entitled to a 1993 deduction for compensation for Rose                 
               in the amount of $139,141, all of which is then-current                
               compensation.                                                          
          Paragraph 51 of the Stipulation of Facts does not add anything to           
          respondent’s determination, and it does not establish that                  
          respondent’s determination is correct.  Because our conclusions             
          as to deductible amounts are based on the evidence and not on any           
          alleged concession as to deferred compensation, petitioners’                
          argument as to the effect of this stipulation and of respondent’s           
          determination in the PKV&S notice of deficiency is unpersuasive.            





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