Yarbrough Oldsmobile Cadillac, Inc. - Page 21

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               The Sylva Residence was sold in February of 1991, and a                
          small loss resulted from the sale.                                          
               On audit, respondent determined that the full $65,000                  
          transferred from YOC to Yarbrough Leasing for purchase of the               
          Sylva Residence represented a constructive dividend from YOC to             
          Elvin, followed by a capital contribution of $65,000 from Elvin             
          to Yarbrough Leasing.                                                       

          Claimed Travel and Entertainment Expenses                                   
               During 1983, 1984, and 1985, miscellaneous personal expenses           
          of Elvin and of Mrs. Yarbrough were paid by YOC, and these                  
          expenses were claimed on YOC's corporate Federal income tax                 
          returns as deductible business travel and entertainment expenses.           
          On audit, a portion of these claimed travel and entertainment               
          expenses was disallowed by respondent and treated as constructive           
          dividends to Elvin in the amounts set forth below:                          

                                                  Amount Disallowed                   
                              T and E Expenses    and Treated                         
                              Claimed             as Constructive                     
               Year           on YOC's Return          Dividends to Elvin             
               1983           $31,048                       $22,014                   
               1984           18,209                        14,012                    
               1985           30,510                        22,080                    

               Petitioners did not introduce any records or other credible            
          evidence in support of the proposition that the above disallowed            
          travel and entertainment expenses qualified as deductible                   
          business expenses of YOC or that they did not represent                     
          constructive dividends to Elvin.                                            


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