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from DC’s payment of childcare for its employees in
1994 and 1995. Just because the employee [sic] hap-
pened to be Barber’s daughters, doesn’t impute receipt
of income to Barber. If there is any imputed income,
it is to the employee [sic], the daughters, not to
Barber.
Respondent counters:
the payment of child care expenses for Barber’s grand-
children * * * constitute constructive dividends to
Barber and petitioners have not argued that the pay-
ments constituted compensation to him, deductible by
Delaware Corporation on that basis. * * * The payment
of Barber’s grandchildren’s child care expenses was
inherently personal and primarily benefited petitioner
Barber and not Delaware Corporation. * * *
On the record before us, we reject petitioners’ argument
that Delaware Corporation’s payments during 1994 and 1995,
respectively, of the disputed child care expenses do not consti-
tute constructive dividends to Mr. Barber for those years and
that Delaware Corporation is entitled to deduct such expenses for
those years. On that record, we agree with respondent that
Delaware Corporation’s payments during 1994 and 1995, respec-
tively, of the disputed child care expenses constitute construc-
tive dividends to Mr. Barber for those years that Delaware
Corporation is not entitled to deduct.
Payments by a corporation for the benefit of relatives of a
stockholder may constitute constructive dividends to such stock-
holder when made at the direction of, or to satisfy the personal
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