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Jean Ann Richard. CFC conferred economic benefits on its
shareholder, Mr. Cordes, by and upon delivering to him the two
$800,000 checks, on March 16, 1994, without expectation of
repayment. CFC provided these funds to Mr. Cordes for personal
reasons, and it is inconsequential that Mr. Cordes subsequently
deposited the funds into CFC’s bank account for his family’s
benefit, rather than directly into his children’s personal
accounts. What Mr. Cordes ultimately did with the funds is not
relevant; CFC conferred upon Mr. Cordes the economic benefit of
control over $1,600,000 for personal reasons. Because CFC
conferred upon Mr. Cordes the ability to dispose of $1,600,000
for any personal reason and received no corporate benefit and did
not expect any repayment, we hold that Mr. Cordes received
constructive dividends in 1994 in the aggregate amount of
$1,600,000.
b. Subsequent Distributions From John Cordes’s
and Jean Ann Richard’s Loan Accounts
In 1994, distributions were made from John Cordes’s loan
account to John Cordes in the amount of $94,000 and from Jean Ann
Richard’s loan account to Jean Ann Richard in the amount of
$90,000. In 1995, payments were made from John Cordes’s loan
account to John Cordes in the amount of $250,000 and to Mrs.
Cordes in the amount of $180,000 and from Jean Ann Richard’s loan
account to Jean Ann Richard in the amount of $120,000 and to Mrs.
Cordes in the amount of $100,000. Respondent determined that the
distributions to Mrs. Cordes in 1994 and 1995 and the
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