Welle v. Commissioner
United States Tax Court
P-H is the sole shareholder of TWC, a subch. C corporation. Ps used TWC to facilitate the construction of their lakefront home in that TWC kept track of construction costs and TWC's framing crew framed the home. Ps, however, personally hired the subcontractors and ordered building supplies from the vendors in TWC's name.
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P-H is the sole shareholder of TWC, a subch. C corporation. Ps used TWC to facilitate the construction of their lakefront home in that TWC kept track of construction costs and TWC's framing crew framed the home. Ps, however, personally hired the subcontractors and ordered building supplies from the vendors in TWC's name. Ps reimbursed TWC for its costs, including overhead, but did not pay TWC an amount equal to the profit margin of 6% to 7% that TWC normally charged its customers (forgone profit). R determined that P-H received a constructive dividend from TWC in an amount equal to TWC's…
1Opinion of the Court
Marvel, Judge:
Respondent determined a deficiency of $10,620 in petitioners’ Federal income tax and an accuracy-related penalty under section 6662(a) 1 of $2,124 for 2006. The issues for decision are: (1) whether petitioner Terry J. Welle received a constructive dividend of $48,275 from his wholly owned subchapter C corporation, Terry Welle Construction, Inc. (TWC), in 2006; and (2) whether petitioners are liable for the accuracy-related penalty under section 6662(a).
FINDINGS OF FACT
Some of the facts have been stipulated. The stipulation of facts is incorporated herein by this reference.…
2Cases cited37 opinions
- Palmer v. CommissionerSupreme Court of the United States · 1937
- Truesdell v. Comm'rUnited States Tax Court · 1987
- Diane S. Blodgett v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 2005
- Commissioner v. WheelerSupreme Court of the United States · 1945
- Knudsen v. Comm'rUnited States Tax Court · 2008
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3Cited by6 opinions
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- Moacir Santos v. CommissionerUnited States Tax Court · 2019
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