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taxpayer’s characterization of the trips as relating to business,
and held that the predominant purpose of most of the trips, despite
having an incidental business purpose, was personal pleasure. We
find no reason or distinction that compels a different result in
the case before us. Petitioners have failed to persuade us that
the expenditures were predominantly for business purposes.
Accordingly, we sustain respondent’s determination that for the
years in issue, the total amounts expended by WVI for petitioners’
entertainment expenses to Hawaii and Key West constitute
constructive dividends to petitioners.
B. Expenditures for the Animal Trophy Collection
We now turn our attention to WVI’s expenditures for the
procurement of the animal trophy collection. Once again, our
factual analysis focuses upon whether the expenditures have an
independent and substantial importance to the payor corporation.
See Gill v. Commissioner, T.C. Memo. 1994-92. Although amounts
spent advancing a personal interest of a taxpayer may constitute
constructive dividends, amounts expended for the legitimate
improvement of a corporation’s trade or business do not.
Petitioners suggest that because the expenditures for the
animal trophy collection constitute capital expenditures, they
should receive different treatment than deductible expenses with
regard to constructive dividend treatment. We disagree. Even if
we were to accept the premise that these expenses otherwise were
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