David Rendel and Rachel Rendel - Page 12

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                    the wrong year in which to tax petitioners on the $174,308                                                                                             
                    withdrawn from CCMI and deposited into the offshore trusts.                                                                                            
                              Respondent argues that the $184,630 that in June of 1983                                                                                     
                    petitioners withdrew from the Alpha account and used to purchase                                                                                       
                    the Oyster Pond Property should be treated as a constructive                                                                                           
                    dividend taxable to petitioners in 1983.                                                                                                               
                              We agree with respondent.  In the instant case, during 1982                                                                                  
                    and early 1983, sufficient control over the offshore trust bank                                                                                        
                    accounts was maintained and exercised on behalf of CCMI so that                                                                                        
                    the funds transferred by CCMI in 1982 through the trusts and into                                                                                      
                    the Alpha account are to be treated as properly taxable to                                                                                             
                    petitioners in 1983, the year in which CCMI's funds were first                                                                                         
                    used by petitioners for petitioners' personal benefit.                                                                                                 
                              During June of 1983, before petitioners withdrew the                                                                                         
                    $184,630 from the Alpha account, $135,000 of the funds in that                                                                                         
                    account was transferred to CCMI, and then from CCMI through the                                                                                        
                    offshore trusts, back to the Alpha account.  Interest of $3,158                                                                                        
                    that was earned on the Alpha account in 1983 was reported on                                                                                           
                    CCMI's 1983 corporate Federal income tax return.  From the                                                                                             
                    inception of the Alpha account, CCMI's taxpayer identification                                                                                         
                    number was used for the Alpha account.  Lastly, petitioners made                                                                                       
                    no personal use of the funds in the Alpha account until June 24,                                                                                       
                    1983, when $184,630 was withdrawn from the account for purchase                                                                                        
                    by petitioners of the Oyster Pond Property.                                                                                                            






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