- 32 -
ownership of all of the stock of Cordes Finance Corp. in 1988.”
By virtue of his beneficial ownership, we held he received
constructive dividends in 1988 and was required to include those
dividends in his gross income.
Mr. Cordes’s relationship to CFC did not change from 1988 to
1989, or during any of the other taxable years before us; in the
taxable years 1989 through 1993, Mr. Cordes remained in complete
control of CFC and remained the beneficial owner of the shares of
stock therein. In deciding beneficial ownership, we examine the
facts and circumstances concerning one’s control over the
property and continued enjoyment of economic benefits.
Yelencsics v. Commissioner, supra at 1532; Cepeda v.
Commissioner, supra; see also Weiner v. Commissioner, T.C. Memo.
1984-163 (citing Schoenberg v. Commissioner, 302 F.2d 416 (8th
Cir. 1962), affg. T.C. Memo. 1961-235; Snyder v. Commissioner, 66
T.C. 785 (1976)).
Mr. Cordes’s actions with respect to CFC exceeded the level
of control normally conferred upon corporate officers. He made
every corporate decision without conferring with the shareholders
of record. Any purported shareholder meeting was an invention of
his design; he made all shareholder decisions and instructed the
legal titleholders merely where to sign the corporate minutes,
loan arrangements, stock certificates, and so forth. The legal
titleholders complied with his every instruction.
Page: Previous 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 NextLast modified: May 25, 2011