-39-
Respondent introduced the copy of the check issued by
Spalding Partners, dated March 1, 1989, and made payable to Carl
E. Jones for $80,051. Respondent concedes that this same
evidence was before the Court in INI, Inc. v. Commissioner,
supra. We found in INI, Inc. that petitioner was president of
INI, and as of September 29, 1988, its sole director, and that
Spalding issued the $80,051 check to INI pursuant to the March 1,
1989, amendment to the agreement to splitup the corporations.
There is no evidence that petitioner deposited the check in his
personal account or any evidence that petitioner expended the
money for his personal benefit. Therefore, although the check is
evidence that petitioner actually received the amount at issue,
it is not persuasive evidence that petitioner received the check
as a shareholder of INI.
Therefore, in conformity with our holding in INI, Inc., we
find that although the check was made payable to petitioner, it
was payable to him in his capacity as president and director of
INI pursuant to the March 1, 1989, amendment to the agreement to
splitup the corporations, and that he received it on behalf of
the corporation. Accordingly, it is not dividend income to
petitioner.
Issue 4. Whether Petitioners Received Constructive Dividends
From INI in 1989, 1990, and 1991
As part of the corporate reorganization and separation of
Spalding and INI pursuant to section 355, Spalding transferred to
INI the account Spalding maintained for the loans it had made to
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