Edward E. and Constance M. Thorpe - Page 22

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               ETCO submitted, as evidence, a policy schedule for the                 
          disability policy covering Mr. Thorpe.  The schedule lists Mr.              
          Thorpe as the "insured" and then lists "the insured" as the                 
          "owner".  Thus, Mr. Thorpe is listed as both the owner and                  
          insured of the policy schedule.  The policy schedule shows an               
          effective date of July 21, 1983, and an annual premium of                   
          $1,073.20 until July 21, 2007.  Similarly, ETCO submitted an                
          application for insurance, which was signed by Mr. Echols, as the           
          "proposed insured".  On the same form just below Mr. Echols'                
          signature, there was another signature line for the "signature of           
          owner/applicant (if other than proposed insured)".  This                    
          signature line was left blank indicating that the insured, Mr.              
          Echols, was intended to be the owner of the policy.  We find this           
          evidence to be determinative in finding that ETCO was not the               
          beneficiary of the two disability insurance policies.  Unlike the           
          taxpayer in Rugby Prods. Ltd. v. Commissioner, supra, ETCO is not           
          a beneficiary of the policies, and our holding in Rugby Prods.              
          Ltd., does not operate to preclude the deductions for the                   
          premiums in this case.  Accordingly, ETCO is entitled to deduct             
          the disability premiums in question.                                        

          Payments From ETCO to Mr. Thorpe and Payments to Eugene Thorpe              

               In the notice of deficiency sent to Mr. and Mrs. Thorpe,               
          respondent determined that $2,775, $2,150, and $1,800 paid to Mr.           
          Thorpe as advance travel allowances for the years 1990, 1991, and           

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