- 37 -
or decreased them as he saw fit, and determined the
time when they should be paid. So whether amounts were
or were not deducted from his salary payments is
immaterial, for the net effect on * * * [the
corporation's] financial status would have been the
same. They came from assets of the corporation. [440
F.2d at 76.]
Interest charges and interest payments indicate an intent to
repay, but the probative value of interest charges may be
significantly reduced if the interest charges did not begin until
after a tax audit was initiated. Crowley v. Commissioner, supra;
Offshore Operations Trust v. Commissioner, T.C. Memo. 1973-212.
In appropriate circumstances, the fair rental value of
property includes all of the days on which the property is
available for personal use, not just the days on which the
property is so used. Nicholls, North, Buse Co. v. Commissioner,
56 T.C. 1225, 1241 (1971); Offshore Operations Trust v.
Commissioner, supra.
The YOC-Elvin Account -- Constructive Dividends
As explained, respondent determined that for 1983, 1984,
1985, and 1986, the amount of the net increase each year over the
prior year in the outstanding balance of the YOC-Elvin Account
should be treated not as a loan but as a constructive dividend to
Elvin. Respondent relies on the following factors. The net
increase each year in the YOC-Elvin Account reflected payments or
transfers of funds by YOC for Elvin's personal benefit. Elvin
did not execute loan documents or promissory notes with regard
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