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payable to Crook Motor Co., Inc. are constructive dividends to
petitioners because they controlled the George K. Reaves account.
Mr. Reaves lent the funds to Lumberton Paving to buy the vehicles
in his capacity as an officer of Reaves Livestock. Mr. Reaves
did not need or personally benefit from the dump truck or the
trailer. Respondent offered no evidence to the contrary.
We conclude that the $11,730 and $23,800 checks to buy the
dump truck and trailer were loans from Reaves Livestock to
Lumberton Paving, not constructive dividends to Mr. and Mrs.
Reaves.
c. George K. Reaves Account Check for the Dillon
House
Respondent contends that the proceeds of the check drawn on
the George K. Reaves account to buy the Dillon house were a
constructive dividend to Mr. and Mrs. Reaves, primarily because
Mrs. Reaves took title to the house. We disagree. Reaves
Livestock used the proceeds from this check to buy a house for
Grant. Reaves Livestock had a reasonable business interest in
helping Grant live closer to work. Grant lived in the Dillon
house, paid for repairs, taxes, and insurance, and later paid
Reaves Livestock for and took title to the house. Neither Mr.
and Mrs. Reaves nor Reaves Livestock made a profit from the
Dillon house.
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