- 63 - Income Tax Regs. Petitioners appear to concede the deductibility issue as they advance no argument. The only remaining matter of contention is whether an ERG check issued on December 31, 1992, for $50,000 made payable to the Bank of America constituted a constructive dividend to the Bensons. Burton used these funds to purchase a $50,000 cashier’s check from the Bank of America made payable to MVPC. The check lists Burton as its purchaser. The Bensons, and not ERG, claimed a $50,000 deduction on their 1993 return. Burton testified that the donation was from him and not ERG. At trial, Burton explained that MVPC “put on both the non-negotiable receipt, they put B.O. Benson and on the face of the [cashier’s] check they put B.O. Benson. The reason, Your Honor, I put it on, I wanted to ensure they knew where it came from.” Accordingly, we find and hold that the Bensons received a $50,000 constructive dividend in 1993 and hold that they are entitled to a charitable deduction for the amount of the donation. See sec. 170(a)(1); sec. 1.170A- 1(a), Income Tax Regs. 7. Excess Rent Paid by ERG Re: Stanford Plant Throughout the years 1988 to 1994, ERG occupied the Stanford plant and paid rent to NPI for its use. The unbundling agreement 55(...continued) the extent that amounts paid by ERG are not constructive dividends to the Bensons they should not also receive the benefit of the deduction, we presume that respondent inadvertently omitted the word “not” between “should” and “be”.Page: Previous 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 Next
Last modified: May 25, 2011