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collateral in consideration for these “advances”. Bruecher
Foundation did not ask for or charge Mr. Bruecher interest and
did not require a repayment schedule for such “advances”.
Bruecher Foundation did report the “advances” as a liability on
each of its Forms 1120 for the fiscal tax years 1998 and 1999.
As previously noted, in the notice of deficiency issued to
Mr. Bruecher, respondent determined for tax years 1998 and 1999
that he received constructive dividends in the amounts of $33,082
and $48,112, respectively. The computation of these amounts was
previously explained. Furthermore, Mr. Bruecher did not argue
that such amounts were inaccurate.
Mr. Bruecher argues that he intended, in good faith, to
create a debtor/creditor relationship with Bruecher Foundation
and that he did have the intent of repaying these “advances”.
However, the only evidence presented by Mr. Bruecher which would
indicate that these “advances” were loans was the corporate
income tax returns (Forms 1120) and Mr. Bruecher’s self-serving
testimony. However, while this evidence is to be considered, it
is not controlling. “Book entries and records may not be used to
conceal a situation which is not in reality what it is made to
appear.” Fenn v. Commissioner, T.C. Memo. 1980-229.
Based upon the objective circumstances, we must reject Mr.
Bruecher’s contention that the “advances” at issue were bona fide
loans. We conclude that such amounts were constructive dividends
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