Jerry S. Payne - Page 19

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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              
               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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