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from property is taxed to the owner of the property at the time
the income is earned. Helvering v. Horst, 311 U.S. 112, 116-117
(1940); Lucas v. Earl, 281 U.S. 111, 114 (1930); see United
States v. Malcolm, 282 U.S. 792, 793-794 (1931). Tax cannot be
avoided through an anticipatory assignment of income. Lucas v.
Earl, supra.
A shareholder receives a constructive dividend to the extent
of the corporation's earnings and profits if the corporation pays
a personal expense of its shareholder or the shareholder uses
corporate property for a personal purpose. Secs. 301(c), 316(a);
Falsetti v. Commissioner, 85 T.C. 332, 356-357 (1985); Henry
Schwartz Corp. v. Commissioner, 60 T.C. 728, 743-744 (1973).
Petitioner does not contend that SRC’s earnings and profits were
less than $84,000, and there is no evidence to suggest that the
earnings and profits requirement is not met. A payment is a
constructive dividend if the corporation has conferred an
economic benefit on the shareholder without expectation of
repayment. United States v. Smith, 418 F.2d 589, 593 (5th Cir.
1969); Truesdell v. Commissioner, 89 T.C. 1280, 1295 (1987).
Petitioner economically benefited from SRC’s payment to Ali
because those payments relieved him of the obligation to make
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