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We hold for respondent on this issue.
San Diego
Markette paid $450 for Betsy’s round-trip airfare to San
Diego. See Findings Check No. 2098--San Diego, supra.
Betsy testified as follows regarding this trip:
Q [McDougal] Now the invoice back on page six also
shows an American Airline charge of $450. Do you see that?
It’s the next charge down after the U.S. Air charges.
A [Betsy] Yes.
Q Page eight shows a receipt in your name from Dulles
to O’Hare to San Diego in the amount of $450, at the bottom
of the page.
A Yes.
Q What was the purpose of the trip to San Diego?
A I had gone out there myself.
Q For what purpose?
A Pleasure.
On answering brief, petitioner’s only response seems to be
“Petitioner knew nothing about said trip.”
Respondent has shown by clear and convincing evidence, and
we have found, that Betsy’s San Diego trip was for personal
purposes and not for Sley Corporations business. We conclude
that Markette’s payment of the $450 airfare constituted
constructive dividend income to Betsy, reportable on petitioner’s
and Betsy’s 1985 joint tax return.
We hold for respondent on this issue.
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