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otherwise improve real property owned by a shareholder, such
costs may constitute constructive dividends to be recognized by
the shareholder as dividend income if the shareholder receives a
benefit attributable to such costs without the expectation of
repayment. Magnon v. Commissioner, 73 T.C. 980, 994 (1980);
Estate of Clarke v. Commissioner, 54 T.C. 1149, 1161 (1970);
Benes v. Commissioner, 42 T.C. 358, 379 (1964), affd. without
published opinion 355 F.2d 929 (6th Cir. 1966).
"Not every corporate expenditure incidentally conferring
economic benefit on a shareholder is a constructive dividend."
Crosby v. United States, supra at 1388. An indirect or
incidental benefit to the shareholder should not by itself be
treated as a distribution to him. Kuper v. Commissioner, 61 T.C.
624 (1974), affd. in part and revd. in part 533 F.2d l52 (5th
Cir. 1976). The crucial test of the existence of a constructive
dividend is whether the expenditure was primarily for the benefit
of the shareholder. Loftin & Woodard, Inc. v. United States, 577
F.2d 1206, 1215 (5th Cir. 1978); Sammons v. Commissioner, 472
F.2d 449 (5th Cir. 1972), affg. in part and remanding T.C. Memo
1971-145; Magnon v. Commissioner, supra at 994. Whether a
corporate payment was made primarily for the shareholder's
benefit rather than for the corporation's benefit is a question
of fact. Loftin & Woodard, Inc. v. United States, supra.
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