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Year Travel Automobile Insurance Total
1993 $27,847 $18,839 $4,803 $51,489
1994 27,847 22,014 8,031 57,892
1995 29,023 37,142 7,796 73,961
Shane Michael agrees with this determination. With the exception
of a $9,374 deduction for taxes claimed in 1995, respondent
disallowed no other amount that Shane Michael reported as a
deduction for the subject years.
Respondent also determined that the adjustment to Shane
Michael's taxable income meant that the Shanes received
constructive dividends of $51,849 in 1993, $57,892 in 1994, and
$72,785 in 1995. The Shanes agree with this determination, and
they agree with another determination that, for each year in
issue, they did not include in their gross income $37,500 of
interest income received from Shane Michael. Mr. Shane had lent
money to Shane Michael before the subject years, and he received
during the subject years interest on those loans. Mr. Shane did
not receive for the subject years a tax form reporting that he
had received that interest.
Mr. Shane uses his automobile for business. He also
traveled on business worldwide and frequently up until the spring
of 1993 when he was diagnosed with cancer and began receiving
medical treatment. At that time, Mr. Shane also stopped keeping
an expense log which, in previous years, he gave to Shane
Michael's bookkeeper for reimbursement of his business expenses
and to his accountant to prepare the Shanes' personal income tax
returns. Shane Michael continued to pay Mr. Shane an expense
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Last modified: May 25, 2011