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$78,199 on their joint income tax returns for 1988, 1989, and
1990, respectively.
Also during 1988 through 1990, Mr. Speer and Mr. Paxson
owned 51 percent and 49 percent, respectively, of the stock of
Maximo Marina, Inc. (Maximo). Maximo was an S corporation that
operated a full-service marina. Maximo also operated a used car
sales operation (Maximo Motors) during part of 1988 and 1989.
Mr. Speer would visit Maxima Motors on his way to HSN to check on
its operations and review the prior day’s sales. Mr. Speer
reported losses from Maximo of $477,836, $1,098,156, and $632,643
on petitioners’ joint income tax returns for 1988, 1989, and
1990, respectively.
Mr. Speer did not keep a diary of the amount of time he
devoted to Gateway and Maximo during 1988, 1989, and 1990.
During those years, Mr. Speer performed work for approximately 30
family-owned companies; however, he devoted a majority of his
time, approximately 75 percent, to his duties at HSN. Mr. Speer
typically worked for these companies in an executive capacity,
making management decisions. Generally, Mr. Speer would try to
visit his various companies two or three times a week.
OPINION
Constructive Dividend Issue
The first issue is whether petitioners received constructive
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