- 27 -
benefit upon him. Loftin & Woodard, Inc. v. United States, supra
at 1214; Noble v. Commissioner, supra at 443.
To the extent that Dura-Craft and Springbrook made payments
to the Plan in excess of the amounts actually owed on the
corporate loans, the corporations conferred an economic benefit.
While Dura-Craft and Springbrook may have mistakenly paid too
much principal and interest, those payments, nonetheless,
satisfied the plan loans, which were the Chapmans' and the
Christies' personal debts due to the Plan. As such, they
provided a taxable benefit to the individual petitioners. We are
satisfied that Milo Chapman and David Christie each received
dividend income during 1989 in the amount of $4,250.12
I. Issue 5. Processing Fee
Finally, we must consider whether the 5-percent processing
fees paid to Northwest and included as a part of Dura-Craft's
cost of goods sold are allowable. Section 61(a) includes "gross
income derived from business" in its general definition of gross
income. Sec. 61(a)(2). Gross income from business means total
sales, less cost of goods sold, plus any income from investments
and from incidental or outside operations or sources. Sec.
1.61-3(a), Income Tax Regs.
12We express no opinion here as to any liability with
respect to the excise tax of sec. 4975 with regard to the plan
loans.
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