- 33 - 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.Page: Previous 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 Next
Last modified: May 25, 2011