- 2 -
Respondent determined deficiencies in petitioners' Federal
income taxes for 1992, 1993, and 1994 in the amounts of $3,682,
$1,733, and $3,129, respectively, and accuracy-related penalties
pursuant to section 6662(a) in the amounts of $736.40, $346.60,
and $625.80, respectively.
The issues for decision are: (1) Whether petitioners
received and failed to report constructive dividends during the
taxable years in issue; and (2) whether petitioners are liable
for the section 6662(a) accuracy-related penalties for the
taxable years in issue.
This case was submitted fully stipulated. The stipulations
of fact and attached exhibits are incorporated herein by this
reference. Petitioners resided in Phoenix, Arizona, on the date
the petition was filed in this case.
All of the substantive adjustments in the statutory notice
of deficiency relate to petitioners' shareholder interests in the
Kathy Harvey Trust Corporation (KHTC). Petitioners have operated
KHTC as a painting business since its incorporation on May 16,
1984.
l. Constructive Dividends
The first issue for decision is whether petitioners received
and failed to report constructive dividends during the taxable
years in issue. Section 61(a) includes in gross income all
income from whatever source derived including, but not limited
to, dividends. Sec. 61(a)(7).
Page: Previous 1 2 3 4 5 6 7 8 Next
Last modified: May 25, 2011