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Social Security number. Franklin opened the account and assigned
it account No. 11102309431 (Franklin account #1). On or about
December 28, 1983, Burton and Elizabeth submitted an account
revision form to Franklin, changing the signatories to “Burton O
Benson/Elizabeth C. Benson and no others.”
Throughout 1988, 1989, 1990, 1993, and 1994, rent payments
received from tenants occupying residential real properties owned
by the Bensons were deposited into the Franklin account #1.
Expenses incurred with respect to those properties were also paid
from this account. During the years 1988, 1989, 1990, 1993, and
1994, dividends were credited to this account in the amounts of
$204, $193, $229, $360, and $1,072.03, respectively.38 For the
years at issue, the Bensons did not report interest or dividend
income from Franklin account #1. However, on his 1994 return
Eric reported dividend income from Franklin account #1 of $1,072.
(b) Forgiveness of Debt Income
ERG’s 1987 Form 1120, Schedule L, Balance Sheet, reported
under the category assets “Loans to stockholders/officers” of
$88,291 as the balance at the beginning and end of that tax year.
For 1988, ERG’s Form 1120, Schedule L, filed August 1, 1994,
reported no amount for “Loans to stockholders/officers”. On or
38The parties stipulated that in 1994 $1,072 in dividends
was credited to this account. In fact, the amount credited was
$1,072.03.
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