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immediate family member, before the end of May 2003 without the
consent of the Harris County-Houston Sports Authority. In the
license agreement, petitioner agreed to use the license himself,
rather than to distribute it or the season tickets to others.
Because petitioner held title to the seat license until 2003,
InsurMark did not benefit from the license in 1999.4
We conclude that InsurMark’s $7,800 payment in 1999 for the
permanent seat license was a constructive dividend to
petitioners.
Decision will be
entered for respondent.
4 Petitioners do not contend, and we do not find, that the
primary benefit of the permanent seat license ran to InsurMark
rather than to them. Cf. Hood v. Commissioner, 115 T.C. 172, 180
(2000).
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Last modified: May 25, 2011