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over which he gave to Belofsky and the transfers to which were
made within 1988, so by yearend 1988 petitioner had ceded control
back to IL NA Tours; (5) Belofsky used the funds in the ANB
accounts to settle the lawsuit with Northwest which related to
debts IL NA Tours owed Northwest; and (6) Chung recorded the ANB
accounts as assets of IL NA Tours on the June 30, 1988, balance
sheet and on IL NA Tours’ 1988 corporate return.
Respondent disputes petitioner’s claim that he had a
corporate purpose for depositing the $986,856 into his personal
brokerage accounts. Respondent contends that petitioner diverted
the funds, and shuffled them through a maze of accounts, to
defraud Northwest so that he could keep the funds for himself.
Whether petitioner was acting as an agent of his corporation
is a question of fact. See Pittman v. Commissioner, 100 F.3d
1308, 1314 (7th Cir. 1996) (question of fact whether
shareholder’s diversion of corporate funds constitutes
constructive dividend), affg. T.C. Memo. 1995-243. We look to
petitioner’s testimony and the objective facts to ascertain
petitioner’s intent. See, e.g., Busch v. Commissioner, 728 F.2d
945, 948 (7th Cir. 1984) (objective factors used to determine
intent), affg. T.C. Memo. 1983-98; Spheeris v. Commissioner, 284
32(...continued)
that were subsequently exercised by Northwest to satisfy
obligations of his corporations.
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