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approximately 65 checks for the construction of the home totaling
$123,909; only $65,137 was applied to reduce Mr. Creske’s note
payable account. Respondent argued that the costs not deducted
from Mr. Creske’s note payable account constituted constructive
dividends.
The issue in Creske turned on whether the failure to apply
the uncredited amounts to Mr. Creske’s note payable account was
intentional or whether it was attributable to a mistake by
Wausau’s bookkeeping department. We found that Mr. Creske
intended to pay for all his construction costs as they were
incurred and that Mr. Creske had the financial means to pay the
construction costs. We held that payment of the expenses
incurred in the construction of Mr. Creske’s personal residence
did not result in constructive dividends to Mr. Creske; rather,
the amounts incurred represented repayment of indebtedness and
were supposed to be posted to his note payable account. Creske
is distinguishable from this case.
Mr. and Mrs. Dobbe have failed to prove that Holland America
intended to treat its payment of the expenses as repayments of
Mr. and Mrs. Dobbe’s shareholder loans. Holland America
disguised the various expenses as “advertising” (landscaping),
“supplies” (groceries), and “small tools” (solarium) deductions.
Petitioners’ accountant testified that Holland America regularly
paid various personal expenses, charged the expenses against the
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