Play Meter

Issue: 1980 April 01 - Vol 6 Num 6

Active hosts meet
Pollock promoted
at Gottlieb
Gilbert G. Pollock , the recently
promoted vice president of opera-
tions of D. Gottlieb and Co . , now will
be responsible for manufacturing,
engineering, product design, pur-
chasing , inventory control , and
employee relations .
"Gil Pollock has an abundance of
talent and a wide variety of
aptitudes." noted Bob Bloom , senior
vice president, in commenting on the
promotion, "but one distinguishing
characteristic makes him ideal for this
job - his obvious strength in human
relations and his stand-out ability to
motivate people, a talent that is
partly inherent and partly as a result
of his early work in personnel.
Along the way he has also developed
wide experience and knowledge in
manufacturing and product design.
We have high expectations as he
assumes this post."
Pollock has a bachelor of science
degree in business administration
from Elmhurst College .
AES charts
record sales
Active Amusement Machines Company in Philadelphia hosted a showing
recently to introduce the new Techna 480 Rock-0/a . The cocktail
gathering was enjoyed by 150 operators, their families and factory
personnel . Above. Active Amusement Machines customers mingle with
Rock -0/a personnel at the meet.
Calendar
March 20-22
Amusement Operators Expo, Fair-
mont Hotel, New Orleans
Illinois Coin Machine Operators
Association
annual
convention
Eagle Ridge Inn . Galena Territory '
Mav 16-18
July 16-20
Music and Amusement Association
annual convention , Host Farm,
Lancaster , Pennsylvania
National Australian AMOA , Queens-
land, Australia
May 16-17
NAMA National Convention / Exhibi-
tion, Bartle Hall, Kansas City ,
Missouri
October 23-26
Ohio Music and Amusement Asso -
ciation Exposition of Games and
Music . Columbus, Ohio
October 31-November 1, 2
June 5-7
Music Operators of Texas , annual
convention and trade show. El Paso,
Texas
June 13-15
1980 AMOA Exposition , Conrad
Hilton , Chicago
November 22-24
IAAPA ( Parks)
New Orleans
Show, Rivergate,
AES Technology Systems, Inc . , of
which Game Plan is a subsidiary
company. achieved record sales and
earnings in its second fiscal quarter
and for the six months ended
December 31, 1979 .
Martin T . Abrams. chairman.
announced earnings of $5:1-0.000, or
eleven cents per share. for the
quarter on revenues of approximate -
ly $5 million . In the same 1979 fiscal
period . the company reported a loss
of $76.000 or two cents a share on
revenues of $2,050,000.
For the six months, operating
revenues were $8,400,00, up 133213
from the $3.600 ,000 reported a year
earlier. Unaudited new income be -
fore taxes for the period was
$480 .000. or ten cents a share ,
versus a loss of $151 , 000 , or three
cents a share. in fiscal 1979 . After-
tax net income for the first half.
which included an extraordinary
credit of $185.000 . was $445.000, or
approximately ten cents a share .
Abrams attributed the sharp in -
crease in sales to the company's new
Game Plan subsidiary, which manu-
factures slot machines and pinball
machines . " It appears that we have
finally turned the corner on profitabil -
ity ." Abrams said , "and with slot
machine production now in full swing
we fully expect this trend to
continue ."
Tax Clinic
Salary of relatives deductible
QUESTION: What are the tax effects
of placing children on the payroll?
ANSWER: Payments to children and
relatives in general are deductible as
compensation only for services actu-
ally rendered , either in connection
with a trade or business , or in the
production
and
generation
of
income
These transactions involve related
parties. and are generally not
considered to be made at arm 's
length . The Internal Revenue Service
and the courts will closely scrutinize
these payments to ensure that they
are made in connection with actual
services rendered , and that the
remuneration is rasonable in relation
to the services . Due to the nature of
these transactions , documentary evi -
dence o f the amounts paid should be
carefully maintained to satisfy the
strict scrutiny that these relationships
are subjected to .
In determining whether these
payments are for services actually
rendered, the courts examine the
circumstances to decide whether a
bona fid e emp loym ent relationship
existed. or whether the payments are
being made strictly for family pur-
poses . The Internal Revenue Service
also scrutinizes the situation where
payment for services rendered to a
child are deposited in Joint Bank
Accounts between the parent and
child to determine if the payments
actually benefitted the child / employ-
ee . The amount of the compensation
paid to the child also must be
reasonable in relation to the work
performed since unreasonable com -
pensation will be disallowed as a
deduction to the employer .
Reasonable wages paid by a
parent to an unemancipated minor
child , under 21 years of age. made
for personal services rendered as a
bona fide employee. are deductible
by the parent. as an expense . The
income of that child is included in his
or her own gross income, and not in
the gross income of the parent.
Payments made to the child for
services normally expected to be
rendered by them as household
members . such as cleaning. mowing
the lawn. etc . . are personal ex -
non -deductible
by
the
penses.
parent.
In the event you are a sole
proprietorship. employment of your
child will benefit both of you since
wages paid to your child who is
under 21 years of age are not subject
to social security tax or federal
unemployment tax. As a result of
the higher costs of social security
taxes.
this exemption
provides
substantial savings to both you and
your child .
The Internal Revenue Code
clearly allows and encourages the
employment of children. providing a
bona fide employment relationship
exists, and wages paid are reason -
able in light of the services actually
performed.
Bob Salmons and Russ MacDonald. Atari technical advisors. travelled
throughout the United States and Europe during January and February
conducting service seminars. Topics covered included basic electronics .
troubleshooting techniques. microprocessor technology. "how to read
schematics." test equipment. power supplies. and Basic IC.

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