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$14.533 million on June 1, 1991; future value equals revised
adjusted common stock equity at the end of the period in
question; and n equals the number of years from June 1, 1991,
through the end of that period.
We think an independent investor would be satisfied with a
16.3-percent compounded annual return on petitioner’s revised
adjusted common stock equity from June 1, 1991, through May 31,
1998.
We find that $16,050,820 is reasonable compensation to Mr.
Wechsler for the 1992 through 1999 fiscal years in issue, and is,
therefore, deductible by petitioner under section 162(a)(1) for
those years in the amounts shown. For some of the years in
issue, however, we have found that reasonable compensation paid
to Mr. Wechsler is less than allowed by respondent. On March 23,
2005, shortly after the trial began, respondent moved for leave
to amend his answer in order to assert increased deficiencies for
the years in issue above those determined in the notice of
deficiency, in the light of the expected testimony of
respondent’s expert, Mr. Hakala. The time for respondent to
amend his answer without leave had expired on September 1, 2004.
See Rule 41(a). On March 23, 2005, we denied respondent’s motion
because of the lateness of its filing on the day of trial and
refused to allow respondent to seek such increased deficiencies.
We shall, therefore, not redetermine a deficiency for any year in
issue greater than respondent determined in the notice for that
year.
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