- 17 -
reported $420 and $2,094 of dividend income for 1991 and 1992,
respectively. The dividend income reported for 1991 and 1992 was
not attributable to any distributions from WVI.
Notice of Deficiency
In the notice of deficiency, respondent determined that the
fair market value of the stock awarded to Dr. Gow on February 16,
1989, was $1,600,000, and the fair market value of the stock
awarded to her on February 15, 1990, was $800,000. After the
issuance of the notice of deficiency, respondent’s valuation
experts revalued the stock awards at $2,142,313 and $597,353 at
their respective valuation dates.
Respondent also determined that petitioners received
constructive dividends from WVI for 1989, 1990, 1991, and 1992 in
the amounts of $305,072, $395,225, $341,521, and $323,281,
respectively. By amendment to answer, respondent increased the
amount for 1991 to $479,844. In his posttrial brief, respondent
concedes that certain expenses paid by WVI in 1989-92 do not
constitute constructive dividends to petitioners.
On the basis of respondent’s redetermination of the values of
the stock awards and the increase in the amount of the 1991
constructive dividend, the deficiencies asserted for 1989 and 1991
increased to $877,054 and $153,214, respectively.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011