- 4 -
shareholder. Petitioner provided minimal services for CTC in FYE
May 31, 1996.
During FYE May 31, 1996, petitioner provided the following
marketing and advertising services for VVI: Photographed models
and VVI products, sponsored pro and semipro athletes, sponsored
various sporting events,4 negotiated with retail stores and
distributors to sell VVI’s products, including developing and
distributing advertising displays and posters to these stores,
and promoted VVI’s traveling trade shows.
D. Petitioner’s Financial Condition and Employee Compensation
On its Form 1120, U.S. Corporation Income Tax Return, for
FYE May 31, 1996, petitioner reported gross receipts of
$1,055,433, with total income of $1,143,468.5 After petitioner
deducted a $500,000 bonus and a $9,000 salary as executive
compensation to Mr. Reeves, $31,757 as salary and wages to its
employees, $113,369 for a supplies business expense, and $426,963
in various other deductions, petitioner’s taxable income was
$62,379 with a total tax of $21,2096 and a net income book value
4 Sporting events included volleyball and waterskiing
competitions.
5 Total income included gross rents of $67,347 and gross
royalties of $20,688.
6 The total tax due included an estimated tax penalty of
$1,029.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
Last modified: November 10, 2007