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John Cordes in 1994 and 1995, respectively; the distributions of
$90,000 and $120,000 to Jean Ann Richard in 1994 and 1995,
respectively; and the distributions of $180,000 and $100,000 to
Mrs. Cordes in 1995 from John Cordes’s and Jean Ann Richard’s
accounts, respectively, do not constitute additional constructive
dividends from CFC to Mr. Cordes.18
2. Cash Distributions to Mrs. Cordes
CFC issued checks totaling $484,651 in 1994 and totaling
$120,000 in 1995 made payable to Mrs. Cordes. All of the checks
were deposited in Mrs. Cordes’s personal checking account.
Respondent determined that all of these distributions constituted
constructive dividends to CFC’s shareholder(s). Petitioners
maintain that the distributions are not constructive dividends to
CFC’s shareholder(s) because the shareholder(s) did not
authorize, receive, or derive economic benefits from the
distributions or, alternatively, that the distributions
represented loans or the repayment of loans to the
shareholder(s).
Respondent also determined that the $180,000 and $100,000
distributions Mrs. Cordes received and deposited in 1995 and
which were charged to John Cordes’s and Jean Ann Richard’s loan
accounts, respectively, were constructive dividends to CFC’s
shareholder(s). We addressed those distributions above. Below,
18Respondent has not alleged that these distributions are
taxable to any of the petitioners on any other grounds nor has
respondent alleged that the distributions are gifts from Mr.
Cordes to the respective recipients.
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