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Respondent allowed some of these expenses in the notice of
deficiency, and we have identified additional promotional
expenses in section II.C.1., above. In addition, although SCC
may not deduct certain capital legal fees, see supra section
II.C.2., we are convinced that those items were of no personal
benefit to Mr. Strong. These items, which are not constructive
dividends to Mr. Strong, are $2,835 in 1993 (check No. 6834) and
$4,000 in 1994 (check No. 7763).
Either the remaining income items disallowed as deductions
to SCC were used by Mr. Strong for personal benefit or he has
failed to show that they were not so used. He made no
distinction between SCC’s funds and his own, by his own
admission. He paid child support, medical bills, clothing,
groceries, travel, and other personal expenses directly out of
account No. 893315300. In addition to failing to properly
substantiate his travel expenses, he has not shown that the
travel expenses were not personal. He has failed to establish
that the remaining nondeductible corporate expenditures had any
legitimate corporate purpose and were not for his benefit.
In summary, the deposits into account No. 893315300
determined to be taxable to SCC are taxable to Mr. Strong as
constructive dividends, less the amounts of (1) the expenses
allowed by respondent, (2) the promotional expenses we have held
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