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for electricity ($2,000), real estate property tax ($2,054), and
hazard insurance premiums ($350) attributable to the Dobbe
residence, and (e) $1,455 for the cost of a set of golf clubs
given to a flower bulb broker/salesman;
(2) whether Mr. and Mrs. Dobbe are entitled to exclude
reimbursement for groceries of $34,276 from their income under
section 119(a); and
(3) whether the payment by Holland America of the expenses
listed in (1) above resulted in constructive dividends to Mr. and
Mrs. Dobbe.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference.
Mr. and Mrs. Dobbe are married and resided at 1066 South
Pekin Road, Woodland, Washington, on the date their petition was
filed. Holland America’s principal place of business was also
1066 South Pekin Road, Woodland, Washington, on the date its
petition was filed.
Holland America, a subchapter C corporation incorporated in
1988 under the laws of the State of Washington, is engaged in the
business of importing and growing flower bulbs, which it sells to
cut flower producers. Since 1988, Mr. and Mrs. Dobbe have been
the sole shareholders of Holland America. During the taxable
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