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category. Petitioner failed to carry his burden of proving that
respondent erred in determining that the remaining $12,759.63
constitutes unreported constructive dividend income to Betsy.
In supra table 12, we set forth our conclusions that
$8,173.56 of the disputed 1986 amounts were constructive
dividends to Betsy, that $160.22 were Sley Corporations’ business
expenses, and that we could not find that the remaining $3,325.84
of disputed Markette payments fit into either category.
Petitioner failed to carry his burden of proving that respondent
erred in determining that the remaining $3,325.84 constitutes
unreported constructive dividend income to Betsy.
We hold for respondent on this issue, except that we hold
for petitioner as to $90 for 1985 and as to $160.22 for 1986.
B. Interest Deduction
Respondent contends that petitioner’s and Betsy’s 1987 joint
tax return overstated an itemized personal interest deduction by
$8,559. Petitioner contends that the interest deduction was
properly taken for 1987. The deduction in issue stems from the
$13,167.96 interest payment Betsy made to Markette.
We agree with respondent’s conclusion.
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