Nariman Teymourian - Page 10

                                       - 10 -                                         
               Given petitioner’s credible and persuasive explanation of              
          the loan application, we find that peitioner has met his burden             
          of proof.  Based on the above, we hold that petitioner did not              
          receive rental income during the years in issue and is thus not             
          liable for any income tax deficiencies relating to rental income.           
          B.  Respondent Improperly Recharacterized Petitioner’s Loans as             
               Constructive Dividends                                                 
               Respondent determined that disbursements made by Caspian to            
          and on behalf of petitioner during the years in issue were                  
          constructive dividends and not loans.  The resolution of this               
          issue does not depend on which party bears the burden of proof.             
          On the basis of the evidence in the record, we hold that the                
          amounts disbursed to petitioner were loans.                                 
               Whether a corporation’s disbursements to an employee-                  
          shareholder are loans or constructive dividends depends on                  
          whether, at the time of the disbursements, the employee-                    
          shareholder intended to repay the amounts received and the                  
          corporation intended to require payment.  J.A. Tobin Constr. Co.            
          v. Commissioner, 85 T.C. 1005, 1022 (1985); Elec. & Neon, Inc. v.           
          Commissioner, 56 T.C. 1324, 1338-1339 (1971), affd. without                 
          published opinion 496 F.2d 876 (5th Cir. 1975); Miele v.                    
          Commissioner, 56 T.C. 556, 567 (1971), affd. without published              
          opinion 474 F.2d 1338 (3d Cir. 1975).  If repayment was intended            
          at the time of disbursement, the amounts are generally considered           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011