David A. Demetree - Page 9

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          present in the office; David routinely signed Arthur’s name; and            
          Arthur, who was in his seventies during the years in issue, was             
          unable to manage Demetree and Associates.  In the alternative,              
          respondent contends that the amounts petitioners received from              
          Demetree and Associates were compensation for services.  We                 
          disagree.                                                                   
               David did not control Demetree and Associates.  See Crowley            
          v. Commissioner, 34 T.C. 333, 345 (1960) (holding that business             
          income is taxable to the person who owns and controls the                   
          business).  Petitioners, both of whom were credible witnesses,              
          testified that, while Deborah worked, David performed domestic              
          duties and was a full-time care provider to their five children.            
          David merely assisted Arthur, who made the major business                   
          decisions.  Arthur successfully ran Demetree and Associates for             
          more than 10 years before David began assisting him, he continued           
          to report the business income on his returns, and he was listed             
          as the owner or broker on the leases and sales agreements.  The             
          only contrary evidence was the testimony of Ms. Lloyd, who was              
          not credible.  Finally, the facts that David signed Arthur’s name           
          using a power of attorney and Arthur was in his seventies during            
          the years in issue are of little significance.                              
               Nor are we persuaded that the amounts that David received              
          from Demetree and Associates were compensation for services                 
          rendered.  Instead, the testimony and documentary evidence                  
          establish that Arthur and Naomi made gifts and loans from                   




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