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will not make that assumption in the absence of confirmatory
evidence. Similarly, the WAs and other documentation indicating
that the money was spent for petitioner’s benefit or that he
actually received the specified amounts (e.g., where petitioner
wrote that he “took” or “spent” the money) do not support his
oral testimony. Rather, those WAs indicate that the listed
amounts were paid to or for the benefit of petitioner and not
merely authorized by him for payment to another. In the absence
of evidence that such money was used for a bona fide promotional
purpose (e.g., as tips for dancers), we must assume that
petitioner retained it. Therefore, we hold that the amounts in
question totaling $4,577 for 1989 and $1,100 for 1990,
constituted distributions to petitioner, taxable under section
301.
Respondent concedes that 2618 had no earnings and profits as
of November 1990, and he does not challenge as inaccurate the
negative retained earnings reflected on 2618's 1989 Schedule L as
of both the beginning and end of 1989. Petitioner neither paid
for his 2618 stock nor included any amount in income resulting
from his receipt of such stock. Therefore, petitioner had a zero
basis in such stock. Consequently, the 1989 distributions
evidenced by WAs dated on or before September 20, 1989 (1 year
after petitioner’s acquisition of his 2618 stock), constituted
short-term capital gain, and the balance of the 1989
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