- 34 -
dividends to Mr. Sutton. Donisi v. Commissioner, supra; Cordes v.
Commissioner, supra.
Unexplained Bank Deposits
Mr. Sutton argues that the unexplained bank deposits in his
personal bank account consist of repayments of his loans to the
corporate petitioner, the proceeds of checks cashed by the store,
loans from Mr. Palmer, and cash distributions from the estate, all
of which would be nontaxable sources. The factual predicate for
that argument has not been established.
We cannot find that Mr. Sutton made any loans to the
corporate petitioner. Thus, any payments out of the corporation
to him cannot be repayment of loans. Ms. Stroud's entries to
Account 135 support respondent's position, indicating that Mr.
Sutton withdrew greater amounts of money than any amounts he may
have contributed. Mr. Sutton has not argued that the funds he
withdrew from the corporate petitioner were intended to be loans
from the corporate petitioner. See Alterman Foods, Inc. v. United
States, supra at 877 n.7. We conclude that any funds that Mr.
Sutton withdrew from the corporate petitioner were constructive
dividends.10
We are unable to attribute any of the unexplained bank
deposits in the Suttons' bank accounts to the proceeds of personal
10 Petitioners have not presented argument or proof that any
distributions would be nontaxable due to the limitations of the
corporate petitioner's earnings and profits.
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