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assert that Mr. Huber, as the corporation’s sole employee, was
required to be available for duty 24 hours a day.
Waterfall Farms leased the Huber farm to Mr. Huber.
Waterfall Farms contracted with Mr. Huber as a tenant, not as its
employee, to perform all necessary work on the Huber farm.
It is well settled that “Ordinarily, taxpayers are bound by
the form of the transaction they have chosen; taxpayers may not
in hindsight recast the transaction as one that they might have
made in order to obtain tax advantages.” Framatome Connectors
USA Inc. v. Commissioner, 118 T.C. 32, 70 (2002) (citing Estate
of Leavitt v. Commissioner, 875 F.2d 420, 423 (4th Cir. 1989),
affg. 90 T.C. 206 (1988), and Grojean v. Commissioner, 248 F.3d
572, 576 (7th Cir. 2001), affg. T.C. Memo. 1999-425). Here,
inasmuch as Mr. Huber farmed the Huber farm as a tenant, and not
as an employee of Waterfall Farms, the food and lodging in
question were not furnished to Mr. Huber as a corporate employee
for the convenience of his employer. Thus, the food and rent at
issue are not section 119(a) meal and lodging expenses.
2. Inclusion of Payments in the Hubers’ Gross Income
When a corporation makes an expenditure that primarily
benefits the corporation’s shareholders, the amount of the
expenditure may be taxed to the shareholder as a constructive
dividend. Hood v. Commissioner, 115 T.C. 172 (2000); Magnon v.
Commissioner, 73 T.C. 980, 993-994 (1980); Am. Insulation Corp.
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