Eugene A. Beck, et al. - Page 46




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          Condo utilities                              1,398         1,580            
          Other personal expenses                      5,239         2,221            
          Property taxes                               1,750         3,296            
          Annual meeting expense                     2,183         1,626              
          Total                                      151,448       117,641            
               A.  Diverted Corporate Income                                          
               The diverted corporate income is the gross receipts omitted            
          from the corporate returns for each year determined as follows:             
                                                1992            1993                  
          State Bank deposits                   $1,475,700      $1,554,350            
          Cash payments                            101,305         75,487             
          Nonincome items                        (335,616)       (391,143)            
          Total gross receipts                   1,241,389       1,238,694            
          Reported on return                     1,126,256       1,153,912            
          Unreported gross receipts                115,133         84,782             
               The State Bank deposit amounts were the amounts deposited              
          into the corporation's State Bank account.  There is no evidence            
          that those amounts were distributed to Mr. Beck or to either of             
          his children.  We hold that those amounts are not constructive              
          dividends to Mr. Beck.                                                      
               The cash payments include the following:                               
          Cash payments                            1992            1993               
          Cash expenses--till                      $3,632          $1,709             
          Wage--till                               18,002           2,382             
          Gambling losses                          15,700            –-               
          Norwest Bank                              2,316           4,026             
          Loan payments                            35,000          44,000             
          Purchase of ring                         10,655            –-               
          Purchase of car                           9,400            –-               
          Merrill Lynch                             6,600            –-               
          Deposit subsequent year                 –-               23,370             
          Total cash payments                     101,305          75,487             






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