-397-
deficiency for 1979 attributable to the disallowance of a loss
of $311,478 the Kanters claimed from Immunological Research Corp.
(IRC), an S corporation in which the Kanters held an interest
through grantor trusts (i.e., the Pillpoppers Trusts).
Respondent determined that IRC was not entitled to a research and
development expense of $980,000 or various other business
expenses it reported for 1979.
FINDINGS OF FACT
The facts underlying this issue were also considered by this
Court in Estate of Cook v. Commissioner, T.C. Memo. 1993-581,155
which involved another shareholder in IRC. In Estate of Cook,
the Court sustained the Commissioner’s disallowance of research
and experimentation expenses under section 174(a), as well as
similar expenses claimed by two other subchapter S corporations,
Antiviral Research Corp. (ARC) and Biological Research Corp.
(BRC), that were engaged in the same activity. Kanter was not a
stockholder in ARC or BRC. In the instant case, the parties
stipulated to the record of Estate of Cook except as to those
portions of the record relating to the other two subchapter S
corporations.
155 The decision the Court entered at docket No. 9533-87,
in accordance with its Memorandum Opinion in Estate of Cook v.
Commissioner, T.C. Memo. 1993-581, was not appealed and is final.
See secs. 7481(a)(1), 7483.
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