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therefore 1993, were dependent on the final
decision in Cordes Fin. Corp. v.
Commissioner, supra. The decision in
Cordes Fin. Corp. became final after the
briefs were filed herein. We leave for the
Rule 155 computation the calculation of
CFC’s earnings and profits and its impact
on the treatment of the constructive
dividends.
b. Respondent concedes that because there were
total credits of $80,000 to account No. 312
during 1993, petitioner is entitled to
credit that amount against the amount we
conclude petitioner received as
constructive dividends for 1993.
c. Petitioners failed to address a number of
the items respondent determined were
constructive dividends for 1993. We deem
petitioners to have conceded those
adjustments. Petitioners’ arguments are
such that only adjustments pertaining to
the distribution of CFC’s funds to John
Cordes and to the receipt of excess
interest from CFC remain at issue.
2. Respondent adjusted petitioners’ income to reflect
their receipt of taxable Social Security benefits
in the amount of $6,860. Petitioners concede this
adjustment.
3. Respondent recomputed petitioners’ itemized
deductions and deduction for exemptions.
Petitioners presented no arguments regarding these
recomputations, and we deem petitioner to have
conceded these adjustments.
4. Respondent determined petitioners were liable for
a penalty for 1993, pursuant to sec. 6662(a), for
substantial understatement of tax. Petitioners
presented no argument regarding the penalty and
concede that, if the Court concludes petitioners
received income in 1993, they are liable for the
penalty to the extent of that income.
The Gift Tax Cases
I. Docket No. 19178-97, Edmund J. Cordes:
A. 1991:
1. Respondent determined petitioner made other
taxable gifts as follows:
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