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improvements to the motor home in 1984, $7,232 was paid to
Mrs. Yarbrough for improvements to the motor home by
Mrs. Yarbrough's interior decorating business.
Occasionally, the motor home was used in connection with
YOC's business, but the majority of the use of the motor home
represented Elvin's personal use. For example, Elvin used the
motor home to travel to Sylva, North Carolina, to visit Buddy,
and to travel to Los Angeles, California, to the 1984 Summer
Olympics. No log or other record indicating the nature and
extent of the use of the motor home was maintained.
Respondent disallowed the above expenses claimed by YOC for
1983 and 1984 relating to the motor home, and respondent
determined that these expenses represented constructive dividends
to Elvin.
The Sylva Residence
In 1984, Elvin purchased for $67,500 a residence in Sylva,
North Carolina, for Buddy's use while Buddy attended college at
Western Carolina University (the Sylva Residence). Title to the
Sylva Residence was placed in the name of Yarbrough Leasing, Inc.
(Yarbrough Leasing), a family corporation owned by Mrs. Yarbrough
(49 shares), by Buddy (49 shares), and by Elvin (2 shares).
On May 17, 1984, YOC transferred to Yarbrough Leasing a
$65,000 check to provide most of the funds necessary to purchase
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