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f. Summary of Food and Lodging Expenses
To summarize, Dreyer Farms may deduct the following expenses
for the years at issue:
11/30/95 11/30/96 11/30/97
Property tax--house $1,283 $1,567 $1,401
Property insurance--house 540 1,042 1,289
Depreciation--house 2,357 3,219 3,326
Total 4,180 5,828 6,016
Dreyer Farms may not deduct the following food and lodging
expenses:
11/30/95 11/30/96 11/30/97
Food for employees $4,406 $7,179 $7,712
Utilities--house 1,694 2,362 2,235
Landscaping 256 216 --
Remodeling costs 1,729 -- --
Repairs and maintenance -- 82 --
Telephone –- –- 338
Total 8,085 9,839 10,285
3. Inclusion of Payments in the Weeldreyers’ 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 shareholders 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.
v. Commissioner, T.C. Memo. 1985-436. We have found that
expenses for food, repair and maintenance, remodeling,
landscaping, utilities, and telephone paid by Dreyer Farms are
the Weeldreyers’ expenses. Petitioners contend that the payments
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