P.R. Farms, Inc. v. Commissioner of Internal Revenue Service

BEEZER, Circuit Judge:

P.R. Farms, Inc. appeals the Tax Court’s determination that 1) interest earned by General Fruit Sales (a fruit broker) on proceeds from sales of P.R. Farms fruit is taxable to P.R. Farms, and 2) Palomate Storage Co. was a mere conduit through which P.R. Farms’ fruit was sold. Pat and Frances Ricchiuti, husband and wife and principal shareholders in P.R. Farms appeal the Tax Court’s determination that interest retained by General Fruit Sales (GFS) and income retained by Palomate constitute constructive dividends taxable to Pat and Frances Ricchiuti. The findings…