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The second issue we consider is whether the deposited
amounts constitute constructive dividends to individual
petitioners. A dividend is a distribution of property by a
corporation to its shareholders out of its earnings and profits.
Sec. 316(a). Dividends are taxable as ordinary income to
shareholders to the extent of the earnings and profits of the
corporation. Sec. 316. A dividend need not be formally declared
or even intended by the corporation. Noble v. Commissioner, 368
F.2d 439, 442 (9th Cir. 1966), affg. T.C. Memo. 1965-84;
Commissioner v. Makransky, 321 F.2d 598 (3d Cir. 1963), affg. 36
T.C. 446 (1961); Sachs v. Commissioner, 277 F.2d 879 (8th Cir.
1960), affg. 32 T.C. 815 (1959). In addition, the distribution
need not be made to a shareholder but only for the shareholder's
personal benefit. Cirelli v. Commissioner, 82 T.C. 335, 351
(1984); Edgar v. Commissioner, 56 T.C. 717 (1971). The
determination of whether a constructive dividend has occurred is
a question of fact which depends on each case. Hardin v. United
States, 461 F.2d 865 (5th Cir. 1972).
Disallowed corporate expenditures are not automatically
treated as constructive dividends to the owner of the
corporation. Rather, the nondeductible expense must also
represent some economic gain or benefit to the shareholder. Palo
Alto Town & Country Village, Inc. v. Commissioner, 565 F.2d 1388,
1391 (9th Cir. 1977), affg. in part, revg. and remanding in part
T.C. Memo. 1973-223. It is well established that a transfer
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