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the corporation’s outstanding stock. If petitioner intended the
treasury shares to be included in the total shares of
corporation stock listed on Schedule E, then it would have
listed the percentages owned by Mr. Apgar and Mr. Oliver
accordingly. For example, petitioner alleges that the total
number of common stock shares was 344, with Mr. Apgar holding
122 shares, Mr. Oliver holding 50 shares, and each then owning
35.5 percent and 14.5 percent of the total shares, respectively.
Petitioner, however, did not indicate these ownership
percentages on its Schedule E for either 2002 or 2003.
Petitioner next argues that it indicated the percentages of
each officer’s stock ownership in relation to the other because
the directions attached to Schedule E require that it list “the
deductible part of each officer’s compensation”. This argument,
however, has no relationship to the percentage of stock owned by
the officers but rather deals exclusively with the total
compensation of officers as indicated on Schedule E, section
(f). Accordingly, we cannot conclude that there is merit in any
of petitioner’s arguments with respect to its completed
Schedules E.
Petitioner next argues that the 172 shares of treasury
stock should be factored into the ownership test as described in
section 448(d)(2)(B) and section 1.448-1T(e)(5)(i), Temporary
Income Tax Regs., 52 Fed. Reg. 22766 (June 16, 1987), as the
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