Henry Deletis, Jr. - Page 19

                                       - 19 -                                         
          1975); Williams v. Commissioner, 627 F.2d 1032, 1034 (10th Cir.             
          1980), affg. T.C. Memo. 1978-306.                                           
               There is no dispute as to the Stables' gross receipts from             
          the purses won by its horses.  Respondent estimated the Stables'            
          expenses and deductions from third-party sources, no evidence of            
          which was presented.  Respondent attributed all of the resulting            
          net income ($16,022.84) to petitioner.  Petitioner is correct               
          that respondent did not allow for all of the Stables' expenses in           
          that fees for one of the trainers were not included.  However,              
          petitioner is not before this Court on behalf of the Stables to             
          contest its liability, but in his individual capacity; thus, we             
          need not address the correct amount of the Stables' taxable                 
               There is no evidence that petitioner received an actual or             
          constructive distribution from the Stables.  Respondent has not             
          alleged that the Stables was a sham corporation so that its                 
          existence as a separate legal entity should be ignored.  We find            
          that the Stables was organized for the business purpose of racing           
          horses and did race its horses.  The Stables' income should not             
          be attributed to petitioner as dividend income.                             
               Petitioner has argued that he is entitled to a loss for his            
          share of the Stables which Singer "stole" from him.  Section                

          6 In some cases, taxpayers must establish the correct amount                
          of a corporation's earnings and profits in order to show that the           
          distribution received was a return of a capital contribution                
          rather than a dividend.  However, this is not such a case.                  

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011