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each of the Sley Corporations had to pay out in order to avoid
the personal holding company tax.
Table 4 shows the amounts of Sley Corporations dividends
paid to Betsy and reported on Schedules B of petitioner’s and
Betsy’s joint tax returns.
Table 4
Year Amount
1983 $36,384
1984
137,609
1985 13,481
1986 18,153
1 Petitioner’s proposed finding 59, not objected to by
respondent, shows this total as $37,573. Our finding is the sum
of the component dividend amounts, which are correctly
transcribed from petitioner’s and Betsy’s 1984 joint tax return.
The $36 difference between our finding and the total on
petitioner’s proposed finding does not affect our analysis.
Travel and Entertainment Expenses8
8 On brief, in proposed finding 165, respondent asks us
to find that “During the years 1893[sic] through 1986, Markette
paid and deducted the following travel expenses”. The proposed
finding then sets forth the amounts shown on Markette’s tax
returns for those years. In compliance with Rule 151(e)(3),
respondent shows exhibits Q, R, and S, retained copies of
Markette’s tax returns, as the sources in the record supporting
the proposed finding as to what Markette deducted as travel
expenses for 1983, 1984, and 1985. As respondent properly alerts
us on brief, “Exs. Q, R, and S were admitted into evidence for
the limited, non-hearsay, purpose of establishing the
compensation and dividends reported by the corporation.”
Respondent’s counsel limited his offer of those exhibits at trial
to the compensation and dividend information shown on those tax
returns. We overruled petitioner’s objections to that limited
offer. The trial adjourned for the weekend, resumed the
following Monday, and continued for an additional 496 pages of
transcript.
Later that same day, respondent’s counsel properly asked to
expand the limited admission. Respondent’s counsel explained as
(continued...)
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