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Also, no expert testimony was given concerning the
reasonableness of the compensation paid by petitioner to either
Mrs. Wechsler or Gilbert. No attempt was made to compare the
compensation paid to Mrs. Wechsler or Gilbert with the
compensation paid to employees rendering similar services in
similar companies, nor is the Court convinced that their services
were unique, making any attempt at comparisons fruitless. As
with petitioner’s failure to offer evidence with respect to the
services Gilbert performed for petitioner, we infer that
petitioner’s failure to offer comparative evidence means such
evidence would have been unfavorable to petitioner. See Wichita
Terminal Elevator Co. v. Commissioner, supra. Consequently, with
respect to the compensation petitioner paid to Mrs. Wechsler and
Gilbert, this factor is negative.
C. Character and Condition of the Company
This factor considers the company’s character and condition.
Relevant considerations are the company’s size as measured by its
sales, net income, or capital value; the complexities of the
business; and general economic conditions. Rapco, Inc. v.
Commissioner, 85 F.3d at 954-955; Elliotts, Inc. v. Commissioner,
716 F.2d at 1246.
Petitioner was a relatively small broker-dealer that had
secured a prominent market niche as a specialist in convertible
securities. It enjoyed an excellent, longstanding reputation for
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