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Petitioner also tries to distinguish Kaw Dehydrating Co. v.
Commissioner, supra, on five grounds. First, petitioner argues
that there were four shareholder bonuses at issue in Kaw
Dehydrating Co. and only one shareholder payment here. It does
not matter how many of the employees who were entitled to share
in the bonuses were also shareholders. What matters is whether
the corporation, following proper corporate formalities, has
timely determined the specific amount payable to each person who
is alleged to have constructively received the funds.
Second, petitioner argues that in Kaw Dehydrating Co. “the
monies were never timely credited to a personal account nor
physically set aside so that they could be withdrawn at any time
by the individual shareholders after the determination.”
Petitioner similarly failed to segregate the money for Mr.
Gentry and his sons, either physically or by an appropriate
accounting entry, prior to the end of petitioner’s fiscal year.
Third, petitioner argues that in Kaw Dehydrating Co. “the
bonuses were paid well over a year after they were allegedly
distributed to the individual shareholders.”4 In determining
whether the constructive receipt doctrine applies, the actual
timing of the payment is not decisive. The funds are treated as
4Petitioner misstates the facts in Kaw Dehydrating Co. v.
Commissioner, 74 T.C. 370 (1980). The bonuses were awarded on
Oct. 3, 1973, and were paid on July 15, 1974--9 months after the
award and 6.5 months after the end of the corporation’s tax year.
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