-163-
Corp.’s payments to KWJ Corp.),85 $882,042 from Frey (through
payments to IRA’s subsidiary, Zeus), (3) $1,398,626 from
Schaffel, (4) $1,941,505 from Schnitzer/PMS (through installment
85 During 1977 through 1983, Hyatt Corp. paid a total of
$907,845 to KWJ Corp. pursuant to the Hyatt/KWJ agreement. See
Table 2, supra p. 90. In early 1979, IRA acquired from Weaver
all of KWJ Corp.’s common stock for $150,000. At the time, KWJ
Corp. had net assets of $115,084. The record also leaves open
the possibility that Hyatt Corp. made a payment to KWJ Corp. for
1978 (a payment that would have been made in early 1979). See
supra p. 90 (Handelsman). After 1978, Weaver forwarded the Hyatt
Corp. payments to Kanter, who had TACI negotiate the checks and
then distribute to Weaver his 30-percent share of each payment.
Petitioners’ Reply Brief at 537. IRA deducted the payments to
Weaver as a commission expense. With the exception of interest
income of $13,796, the payments from Hyatt Corp. represented KWJ
Corp.’s sole source of funds. Exh. 9076 (Kuck Summary # 2.b.);
Exh. 10, at 15; Exh. 14, at 6; Exh. 17, at 15; Exh. 18, at 19;
Kuck, Transcr. at 3445-3446.
KWJ Corp.’s total application of funds for 1979 through 1983
was approximately $674,900 as follows:
Year Application Amount Exhibit
1979 Dividend to IRA $60,000 10, at 4, sched. M-2,
Kuck, Transcr. at
3446
1980 -- -- --
1981/82 Dividend to IRA 260,000 14, at 40, l. 5
17, at 27; l. 28
25, at 21; Kuck,
Transcr. at 3446-
3447
1983 Dividend to IRA 297,900 18, at 30
1982 Consulting Fees 21,000 17, at 16, l. 23
1983 Consulting Fees 36,000 18, at 20
Total 674,900
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