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corporation’s receipt of funds will be disregarded where it has
no dominion and control over, or beneficial interest in, the
funds; temporary physical possession of funds is not enough);
Hallowell v. Commissioner, 56 T.C. 600 (1971) (shareholder
transferred greatly appreciated marketable securities to close
corporation, which sold the securities shortly thereafter and
then made distributions to or for benefit of shareholder in
amounts roughly corresponding to realized gain; held,
notwithstanding their form, transactions were in substance sales
of securities by shareholder rather than by corporation).
We hold that Mr. Comey’s 1992 income includes the $2,919 in
dividends paid on stock registered in Landtrak’s name and the
$407,306 in net capital gain realized in 1992 on the sales of
stock in the PaineWebber account, as determined by respondent.
3. Penalties Determined Against Mrs. Comey
Respondent determined that Mrs. Comey is liable for the
following accuracy-related penalties under section 6662: A
$5,136 penalty for 1991, attributable to a substantial
understatement of income tax (see sec. 6662(a) and (b)(2)); and a
$56 penalty for 1992, attributable to negligence or disregard of
rules or regulations (see sec. 6662(a) and (b)(1)). Mrs. Comey
bears the burden of proving that respondent’s determinations of
these penalties are erroneous. See Rule 142(a); Monahan v.
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