- 54 - 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.Page: Previous 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 Next
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