- 28 -
Son, Inc. v. Commissioner, 56 T.C. 453, 462-463 (1971);
citation omitted.6]
It is the right rather than the power to receive income that
determines whether such income is constructively received. Id.
at 463. However, Mr. and Mrs. Heitz had the right to receive the
interest income at the time that it was accrued. Nothing in the
record indicates that the interest in question was not subject to
their unqualified demands thereafter. Mr. and Mrs. Heitz argue
that Mr. Heitz had no discretion to order payment because two
signatures were required to validly issue an Exacto check. We
find this argument unpersuasive. Mr. and Mrs. Heitz presented no
evidence that Mr. Heitz ever requested that a check be issued for
the interest payments or that such a request would have been
denied. Mr. Heitz had the right and authority to order the
payment of interest that had accrued. See Fountain v.
Commissioner, 59 T.C. 696, 705-706 (1973).
Mr. and Mrs. Heitz contend that Exacto did not have the
funds available to pay the interest in question. On December 31,
1992 and 1993, Exacto held cash, cash equivalents, and marketable
securities in the amounts of $2,792,123 and $3,129,900,
respectively. Mr. and Mrs. Heitz contend that these liquid
6 Most of the cases discussing the doctrine of constructive
receipt with respect to interest income apply to sec. 267. In
the cited case, the Commissioner was arguing that there was no
constructive receipt of interest income by the employee in order
to deny the employer-corporation the corresponding deduction.
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