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Beck has failed to prove that it is more likely than not that
these items were loans. There are no loan documents, and there
is no evidence that Mr. Beck, Michael, or Michelle ever intended
to repay the corporation for the payments. Those amounts are
dividends to Mr. Beck.
B. Remaining Expenses
Respondent asserts that the remaining items are personal
expenses of Mr. Beck that were paid for by the corporation.
Corporate shareholders who use corporate property for
personal purposes or for whom the corporation pays personal
expenses are charged with additional distributions from the
corporation, taxable to them as constructive dividends to the
extent of the corporation's earnings and profits. Melvin v.
Commissioner, 88 T.C. 63, 79 (1987), affd. per curiam 894 F.2d
1072 (9th Cir. 1990); Challenge Manufacturing Co. v.
Commissioner, 37 T.C. 650, 663 (1962). When a corporation has
made such a transfer to a member of the shareholder's family, the
shareholder has enjoyed the use of such property no less than if
it had been distributed to him directly. Byers v. Commissioner,
199 F.2d 273 (8th Cir. 1952), affg. a Memorandum Opinion of this
Court.
If a corporation provides property for or pays personal
expenses of employees in their capacity as such, the employees
are charged with additional income in the form of constructive
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