-281-
There likewise is no support for Kanter’s assertion the
allocations to Carlco, TMT, and BWK would allow for
diversification of IRA’s investments.119 While Lisle invested
Carlco’s assets primarily in municipal bonds, the record reflects
that Ballard also invested up to 30 percent of TMT’s assets in
bonds, including municipal bonds. In addition, as of 1989,
another 20 percent of TMT’s assets was allocated to cash and
notes receivable (many of which were due from Ballard). Under
the circumstances, Kanter’s purported asset allocation achieved
very little in the way of diversification of investments.
Finally, Kanter’s explanation for the removal of Carlco,
TMT, and BWK from IRA’s consolidated group of corporations for
tax reporting purposes is implausible. First, even if it were
logical to remove Carlco from IRA’s consolidated group to protect
IRA’s interest deductions, this explanation does not clarify why
TMT and BWK (which were to invest primarily in real estate and
other miscellaneous investments, respectively) were likewise
removed from the consolidated group. There was no indication
that TMT’s and BWK’s planned investments would imperil IRA’s tax
deductions. Moreover, if Carlco, TMT, and BWK had truly remained
subsidiaries of IRA as Kanter contended, their removal from IRA’s
consolidated group for tax-reporting purposes would have done
119 Kanter did not manage the funds in BWK. As Kanter
testified: “BWK didn’t work out that way because I just didn’t
have the time to pay attention to it.” Kanter, Transcr. at 3701.
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