- 31 - machines, in part, because they did not own or show their ownership of the machines. Respondent proposed several arguments in response to petitioners’ argument that they are not required to report the income if we find, as we did, that they did not own the vending machines. Respondent argued that payments made to third parties on behalf of a corporation’s sole shareholder are income to the shareholder. That argument is inapposite with respect to the amounts petitioners reported on their 1986 and 1989 returns as income from the vending machines that they believed they owned. In another part of this opinion we address the question of whether payments made to or on behalf of petitioners are income to them and should have been reported by them. Respondent also argued that petitioners constructively received the income from the vending machines and income from the sale of the Crestwood property. As to the constructive receipt, respondent does not contend that petitioners specifically received the $163,001 or $72,817 amounts from the corporations or that those amounts are constructive dividends. Although the record reflects that petitioners are required to report certain income they received as compensation or because the corporation(s) paid petitioners’ obligations, that matter is also addressed in another portion of this opinion. Attribution of the amounts reported as vending machine receipts to the amountsPage: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Next
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