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constructive dividends to Mr. and Mrs. Reaves unless they were
used for their personal benefit. The Lumberton Auction Co.
checks were not paid for Mr. and Mrs. Reaves' personal benefit
except for the $95 check payable to Mr. Reaves.
4. Undecipherable Check Payable to Mike Reaves and
Endorsed by Mike Reaves
Respondent contends that Mr. Reaves received the cash from
an undecipherable check payable to Mike Reaves. We disagree.
Mike Reaves endorsed the check and received the cash. We
conclude that it is not a constructive dividend to Mr. and Mrs.
Reaves.
5. Disputed Checks Written on the First Citizens Accounts
The parties dispute whether several checks (described next)
written on the First Citizens accounts are constructive dividends
to Mr. and Mrs. Reaves. Respondent contends that they are,
because Mr. and Mrs. Reaves controlled the disposition of the
funds in the First Citizens accounts and petitioners used the
proceeds of these checks for personal purposes. Petitioners
contend that they used the proceeds from these checks for
business purposes and that they did not receive any personal
benefit.
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