Steven K. Han - Page 88





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               In accordance with our earlier analysis, petitioner                    
          exercised dominion and control over the Kodak stock before                  
          returning the proceeds from its sale to his corporations (by                
          virtue of the transfer of those proceeds to the ANB No. 1 account           
          on June 24, 1988).  Specifically, after being moved from                    
          petitioner’s FCIS account to the P-B No. 1 account, to the Sam              
          Han account and back to P-B No. 1, the Kodak stock was sold on              
          June 24, 1988, for a net of $445,598, which was transferred that            
          same day to ANB No. 1.  Since petitioner purchased the Kodak                
          stock with diverted corporate funds of $448,878 and returned only           
          $445,598 to his corporations, he is chargeable with $3,280 in               
          income as a result ($448,878 - $445,598 = $3,280).46                        


          (...continued)                                                              
          stock exceeds respondent’s determination because petitioner sold            
          the other stocks purchased with corporate funds at a profit and             
          returned the augmented proceeds to a corporate account.  Because            
          of this augmentation of the returned proceeds, respondent’s                 
          computation of the “net” proceeds retained by petitioner–-                  
          measured by the amount taken less the amount returned–-is less              
          than the actual corporate funds retained by petitioner and                  
          invested in the Kodak and Pan Am stock.  See discussion supra               
          pp. 45-46.                                                                  
               46 As noted earlier, petitioner reported the loss from the             
          sale of Kodak stock on his 1988 return.  Since the diminution in            
          the stock’s value occurred while it was under petitioner’s                  
          dominion and control, and he is chargeable with the income                  
          resulting from his return to his corporations of Kodak stock                
          proceeds that were less than the corporate funds used to acquire            
          the stock, we conclude that petitioner is entitled to the loss as           
          claimed.                                                                    






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