-53-
substantial detail below. IRA also, at one point, owned a
majority stock interest in International Films, Inc.
e. IRA’s Business Activities
IRA’s principal activity was making investments, either for
itself or through its subsidiaries. It maintained bank accounts
and books and records of its activities. In connection with its
investment activities, IRA utilized the services of its officers,
employees, advisers, and consultants, among whom was Kanter.
IRA was primarily a vehicle for holding passive investments
and generally had no paid employees. Meyers, Transcr. at 2911-
2912; Petitioners’ Reply Brief at 66. During the period 1983 to
1989, IRA did not claim any deductions for salaries, wages, or
compensation paid to its officers. Exhs. 18-24.
2. Carlco, Inc., TMT, Inc., and BWK, Inc. (STJ report at
17-18)
Kanter was a beneficiary of a trust called the Morkan Trust
No. 1.29 Exh. 56. On October 17, 1983, Kanter exercised a
limited power of appointment under the Morkan Trust No. 1 and
directed the trustee, Roger Baskes,30 to transfer $2,500 to each
of two newly formed trusts: Christie Trust and Orient Trust.
29 Morkan Trust No. 1 was named after Kanter’s father,
Morris Kanter. Exh. 56.
30 Roger Baskes was a lawyer employed at one time at
Kanter’s law firm. Baskes, Transcr. at 542-543.
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