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were not his to keep, and which he was required to transmit to
someone else as a mere conduit.” Diamond v. Commissioner, 56
T.C. 530, 541 (1971), affd. 492 F.2d 286 (7th Cir. 1974). The
receipt of money by a taxpayer acting in an agency or fiduciary
capacity ordinarily is not a taxable event to that taxpayer.
Heminway v. Commissioner, 44 T.C. 96, 101 (1965). The mere fact
that funds pass through an owner-taxpayer’s hands is not
determinative of a constructive dividend. Ashby v. Commissioner,
50 T.C. 409 (1968); Marks v. Commissioner, T.C. Memo. 1963-304.
A greater potential for constructive dividends, however,
exists in closely held corporations where dealings between
stockholders and the corporation are commonly characterized by
informality. Bittker & Eustice, Federal Income Taxation of
Corporations and Shareholders, par. 8.05, at 8-39 (7th ed. 2000).
“Where a shareholder uses corporate property for his personal
benefit, not proximately related to corporate business, the
shareholder must include the value of the benefit in income as
constructive dividends to the extent of the corporation’s
earnings and profits.” AJF Transp. Consultants, Inc. v.
Commissioner, T.C. Memo. 1999-16, affd. 85 AFTR 2d 1909, 2000-1
USTC par. 50473 (2d Cir. 2000); see also DiZenzo v. Commissioner,
348 F.2d 122, 125 (2d Cir. 1965), revg. in part and remanding
T.C. Memo. 1964-121; Truesdell v. Commissioner, supra; Falsetti
v. Commissioner, 85 T.C. 332, 335-336 (1985); Nicholls, North,
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