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found petitioner diverted from his corporations in 1988 is to be
treated as a gain from the sale or exchange of property.
Dividend Income Issue
In the notice of deficiency, respondent determined that
petitioner had unreported income for 1988 of $12,91251 relating
to dividend income credited to his FCIS account and to P-B No. 2.
Petitioner has the burden of proving that he did not underreport
his income relating to those accounts. Rule 142(a). Respondent
contends that petitioner did not offer any credible evidence
regarding this issue.
By amendment to his answer, respondent additionally asserted
that petitioner had unreported income for 1988 of $20,641
relating to dividends credited during 1988 to the Sam Han, Chung
No. 1, and Chung No. 2 accounts. The parties agree that those
three accounts received dividend income totaling $20,641 during
1988. Respondent has the burden of proving the increased
deficiency relating to the $20,641 dividend income. Rule 142(a).
As previously noted, the Sam Han, Chung No. 1, and Chung No. 2
accounts were owned and controlled by petitioner.
Petitioner contends that none of the $33,554 in dividends in
the original determination or the amended pleadings is taxable
51 The parties have stipulated that the dividends paid on
stocks in the FCIS and P-B No. 2 accounts totaled $12,912.
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