- 30 -
For 1983, 1984, 1985, and 1986, none of the expenses
described above that were paid by YOC for Elvin's personal
benefit were reported as income on Elvin's Federal income tax
returns. As indicated on audit, respondent determined that these
expenses were incurred by YOC for Elvin's personal benefit and
that they represented constructive dividends to Elvin. The
following schedule sets forth a summary, by category, of the
constructive dividends that respondent determined Elvin received
from YOC. Each category reflects the manner in which the
expenses were reflected on YOC's books and records. For example,
the "salary expense" category reflects the salary paid by YOC to
the captain of the Capriole that respondent treated as
nondeductible to YOC and as a constructive dividend to Elvin.
Constructive Dividends
Determined by Respondent
Relating to 1983 1984 1985 1986
The YOC-Elvin Account $137,673 $ 17,510 $ 64,825 $258,939
Capriole - 170,635 133,179 -
Sea Ray Boat 1,155 - - -
Motor Home 10,697 16,802 - -
Sylva Residence - 65,000 - -
Travel/Entertainment 22,014 14,012 22,080 -
Employee Benefits 25,676 1,768 - -
Utilities 2,461 3,281 - -
Company Vehicle Expense 1,663 2,179 4,084 -
Miscellaneous Expense 1,945 2,869 1,228 -
Repair Expense 9,693 312 2,227 -
Insurance Expense - - - -
Outside Services 132 968 6,242 -
Depreciation - - 2,400 -
Salary Expense 8,203 10,600 21,411 -
Interest Expense - 2,053 10,947 -
Demonstrator Vehicles 14,352 18,167 22,708 -
Elvin's Residence - - - 15,136
Total $235,664 $326,156 $291,331 $274,075
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