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$15,000. Indeed, the policy was not for the benefit of ERG but
for the Bensons. If Burton had died after repayment, Elizabeth
would have received $15,000 more as a death benefit than if the
loans had not been repaid. Accordingly, we find and hold that
the $15,000 was a constructive dividend.
11. Travel Expenses
On brief, respondent concedes that the Bensons did not have
constructive dividend income with respect to items of expense
Burton substantiated. Respondent concedes the following items on
the basis of Burton’s explanation at trial: Karim Cycling
$16.24, Surf Berkeley $56.40, and Claremont Resort $2,504.30.
The balance is still at issue.
Burton testified that a $9.23 expense was “Probably * * * a
tank of gas that went into a rental car.” (Emphasis added.)
Some of the charges were incurred in Corvallis, Oregon, where
Burton’s son was attending college.62 Finally, expenses were
incurred by Pastor Nelson with respect to the performance of
memorial services on behalf of Esther. Burton testified that
these expenses were allocated to ERG because his mother was a
director of ERG. After respondent presented evidence supporting
his contention that these items constituted constructive
dividends, with the exception of Burton’s self-serving testimony,
62Burton testified that these expenses were incurred on a
visit to a Hewlett Packard laser and jet ink printer division.
He did not explain what that visit had to do with ERG’s business.
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