of taxes paid for the 1982 tax year, as well as damages for alleged civil rights violations. The Uppers filed the instant motion for summary judgment on September 8, 1994. The government filed its cross-motion for summary judgment on September 29, 1994.
The entry of summary judgment is appropriate only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). If a disputed fact exists that, under the controlling substantive law, might affect the outcome of the suit, then entry of summary judgment is precluded. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
In this case, there is no genuine issue as to the single material fact -- whether $ 13,295.00 owing on the Uppers' home mortgage during 1982 was paid out of the corporate funds of Jim Upper & Co., Inc. The Uppers admit in their pleadings that the mortgage payments were made out of the corporate checking account. The Uppers argue that they also deposited personal monies into the corporate checking account, but the fact remains that they never reported the $ 13,295.00 as personal income at any time, though they did deduct the interest portion of the mortgage payments from their personal income. This is a classic case of trying to eat your cake and have it, too.
There is also no doubt that the government is entitled to a judgment as a matter of law. The Internal Revenue Code provides that "gross income means all income from whatever source derived." 28 U.S.C. § 61(a). Amounts paid from corporate funds to cover personal expenses of a shareholder are clearly income as defined in § 61(a) where there is no evidence of an intention to repay the funds. See Silverman v. Commissioner, 28 T.C. 1061, 1064 (1957); aff'd, 253 F.2d 849 (8th Cir. 1958). There is no evidence of an intention to repay the $ 13,295.00 to the corporation in this case; therefore, the money should have been reported as personal income.
Accordingly, the court will deny the Uppers' motion for summary judgment and grant the government's cross-motion for summary judgment.
For the foregoing reasons,
IT IS ORDERED on this 7th day of March, 1995, that the motion of plaintiffs James W. Upper and Carol A. Upper for summary judgment is DENIED.
IT IS FURTHER ORDERED that the cross-motion of defendant the United States for summary judgment is GRANTED.
JOSEPH H. RODRIGUEZ
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