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to Mr. and Mrs. Thurman in the respective amounts of $758,745 and
$1,228,320.
Moreover, EMFI actually made two separate distributions that
petitioners initially did not report as taxable income for 1992.
Petitioners amended their 1992 Form 1040, the year in which the
distributions were made and included the distributions in taxable
income and paid the related tax. Ultimately, petitioners filed
another amended return in which they removed the distributions
from taxable income, made a claim for refund, and now assert that
EMFI did not make an election to first distribute earnings and
profits.
With respect to petitioners' individual filings, evidence
that EMFI intended to file an election is further diminished by
the fact that petitioners filed their first amended return, which
represented the distributions as dividends, on June 18, 1993,
whereas EMFI was not required to file Form 1120S for the fiscal
year ended October 31, 1993, until long after petitioners filed
their amended return. It is certainly conceivable that EMFI,
through its officers, made a decision as to whether or not to
file an election between the time that petitioners filed their
amended return in June 1993 and the time that EMFI filed its
corporate return.
Although there appears to be some confusion in petitioners'
individual filings, it is clear that no election was filed by
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