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The amount of cash that was not reported by the corporation
that is attributable to cash taken from the till to cash employee
checks and to pay for expenses was not cash distributed to Mr.
Beck and is not a constructive dividend to him.
Mr. Beck did not have gambling losses during the years at
issue. Rather, he had gambling winnings of $8,300 in 1992 and
$12,000 in 1993. Mr. Beck did not report the gambling winnings
as income. Although the winnings are not constructive dividends,
they are income to Mr. Beck that is to be included in his income
for the years at issue. We have found that the cash winnings
represent a source of cash, and the cash payments should be
reduced by $8,300 in 1992 and $12,000 in 1993.
The $6,600 was deposited into the corporation's Merrill
Lynch account in 1992; Mr. Beck did not receive the money, and it
is not a constructive dividend to him. Similarly, the Norwest
account is the corporation's account, and the cash deposited into
that account is not a constructive dividend to Mr. Beck. The
$23,370 received at the end of 1993 and deposited into the State
Bank account in January 1994 also is not a constructive dividend
to Mr. Beck.
Mr. Beck asserts that the $10,655 paid in 1992 for the ring
was a cash loan to him, that the $9,400 paid in 1992 for the car
was a cash loan to Michael, and that the loan payments of $35,000
in 1992 and $44,000 in 1993 were cash loans to Michelle. Mr.
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