We are also satisfied from the testimony of the petitioners themselves, and from other corroborating evidence, that it was the intention of each of them to remain indefinitely in such Pan American downrange service and on any island to which he was assigned.

The petitioner Matthew testified that the overseas assignment with Pan American appealed to him, that he considered such work interesting and stimulating, and that it was his intention to remain on the missile stations indefinitely and make a career of it. He applied for downrange assignment about November 1, 1955, and at the time of the hearing in this case he had been employed downrange for a period of about 5 years. His first assignment, on November 1, 1955, was San Salvador. He stayed there until the latter part of February 1956, a period of about 4 months, when he was transferred to Grand Bahama Island. His assignment on Grand Bahama continued until about June 1, 1957, a period of about 14 years. He volunteered to be transferred to Ascension Island and stayed there about 6 months, when he requested a transfer. He was transferred on December 15, 1957, to Grand Bahama, and such assignment continued thereafter up to the time of the trial of this case.

The petitioner Hill testified that he applied for downrange employment as a career. He applied for such downrange assignment about the latter part of September 1955, and at the time of the hearing of this case he had been employed downrange for a period of about 511⁄2 years. His first assignment was at Grand Bahama, where he stayed for about 4 months when he was transferred, on January 28, 1956, to Mayaguana. He remained on that assignment until the middle of January 1959, a period of about 3 years, when he was transferred to San Salvador. He stayed there for a period of about 10 months and was then assigned to Antigua on November 12, 1959, and was still so assigned at the time of the hearing in this case.

The petitioner Floyd testified that in 1954 while he was assigned to San Salvador he recognized the opportunity to regain his health and to revamp his life and that he was happy to remain downrange. He stated further that he feels loyal to Pan American because of the fact he has received favorable treatment from the company despite his injury and that he realized that there was an opportunity downrange to do something not only for Pan American, but also for the United States. At the time of the hearing in this case he had been assigned downrange about 7 years, and in point of service he was among the oldest of Pan American's downrange employees. He was first assigned to San Salvador on June 1, 1954, as a fire security guard. After about 6 months Pan American decided that due to his injury he should not be around fire-fighting equipment and accordingly transferred him, in the latter part of December 1954, to Grand

Bahama as a supply clerk. He remained there for about 211⁄2 years, when, about July 1, 1957, he was transferred to Ascension Island. He remained there until sometime in 1959 when he was transferred to Antigua. In the latter part of 1960 he was transferred to Eleuthera where he was located at the time of the hearing of this case.

It is true that Pan American discouraged the taking of families to the islands (providing only barracks for the employees), that there was, generally speaking, inadequate family housing on the islands, and that during the years in question none of the petitioners had his wife or family with him, except for a period of 2 weeks in January 1956 when Hill had his family with him in a house on Grand Bahama. However, despite this we are satisfied that the intention of each petitioner was to remain indefinitely on the islands. Each of them at times made attempts to find housing for his family at his place of assignment, but without success. Matthew in 1956 leased some property on Grand Bahama with a view to housing his family in a trailer thereon, but found that other facilities would be inadequate. In 1961 he purchased a lot close to a housing project on Grand Bahama. In 1959 Hill leased a lot on San Salvador with the intention of building a home thereon for himself and his wife, but a transfer to another island frustrated his intention. He later, after the years in question, found accommodations on Antigua and took his family there.

The fact that the petitioners made frequent trips back to the United States to visit their families and for other purposes is not, in our opinion, indicative of an intention on their part to stay only temporarily on the islands. In each instance the intention was that the trip back to the United States would be temporary.

As shown in our Findings of Fact, the petitioners in documents relating to homestead tax exemption, marriage certificates, and complaints for divorce, made certain statements which might tend to indicate that they intended to retain their residences in the United States. However, considering the purposes for which such statements were made, and the explanations given with respect to some of them, it is our opinion that they do not destroy the overall effect of their testimony and other evidence that their intention was to stay downrange indefinitely. Their representations as to residence for those purposes cannot be considered determinative of the question of residence for purposes of section 911 (a) (1) of the Code. Similar statements made by the taxpayers in White v. Hofferbert, supra, and Weible v. United States, supra, were held not determinative.

There remains for consideration the question whether, within the meaning of the regulations, each petitioner made his home temporarily in the foreign country or countries. As stated, each of them,

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with one minor exception, resided in the company-supplied housing and ate at the company messhalls. In Swenson v. Thomas, supra, the court held that making a "home temporarily" does not mean necessarily buying a house, but means no more than living in a foreign country temporarily. In Seeley v. Commissioner, supra, it was stated that a man who settles down to an indefinitely continuing performance of duties, for the time being at least, has a "home." In Fuller v. Hofferbert, supra, it was stated that a citizen makes his home temporarily in a foreign country when he enters into the life of the community, takes part in the activities of the people, engages in social intercourse with the citizens, cultivates friendships with them, and identifies himself with their daily lives and their amusements, while intending to continue to live in their country for an indefinite period. And we have in effect held that a citizen is making his home temporarily in a foreign country even though he resides in companyfurnished facilities. Leonard Larsen, 23 T.C. 599. See also Audio Gray Harvey, 10 T.C. 183. Here the petitioners, although living upon the bases, were free to come and go as they pleased, except during working hours, and they did, in fact, as pointed out in the Findings of Fact, associate with the people of the various islands and attended social functions and institutions on the islands.

We have carefully considered the contentions made by the respondent. His position is that the petitioners are in a unique position in that special provisions were made for their entry on the islands for purposes of the work in connection with the long range missile program. He points out that they were not subject to tax on the islands, that they could import certain necessary items, including their household goods, free of duty, and that to some extent they were subject to the jurisdiction of the United States with respect to crimes committed. He contends that they were under the direct control and jurisdiction of the United States and that they were, in essence, employees of an instrumentality of the United States. He maintains that they did not undertake any of the obligations of a bona fide resident of a foreign country, such as submission to a foreign sovereign or making a home in a foreign country, and that under these circumstances they should not be considered as bona fide residents of a foreign country or countries under the statute.

The petitioners were not under the direct control and jurisdiction of the United States and were not employees of an instrumentality thereof. They were employed and compensated by Pan American and were under its direction and control, albeit they undertook to abide by the provisions of the agreements between the United States and the foreign governments. The situation of Pan American's downrange personnel probably was unique in that they were subject

to concurrent jurisdiction of the United States and the local government for offenses committed on the sites, if a civil court of the United States should be sitting in the Bahama Islands, and under some circumstances they were subject to the exclusive jurisdiction of the United States for security offenses committed either on or off the sites. Otherwise, however, the jurisdiction of the local courts was not affected. Such personnel were also relieved of some burdens normally incident to foreign residence, such as taxes and import duties. However, we do not believe that these facts require or justify the conclusion that their residence was tantamount to residence in the jurisdiction of the United States. It has been held that, although avoidance of double taxation may have been one of the motives for the original enactment of section 116(a) of the 1939 Code, the payment of taxes to a foreign government, or liability therefor, was not made a condition precedent to the permitted exemption. David E. Rose, 16 T.C. 232; White v. Hofferbert, supra, and Meals v. United States, supra.

The respondent has cited the so-called "war-worker" cases," in which exemption was denied. Although there are some similarities between those cases and the instant cases, there are distinguishing differences. In those cases, unlike the instant cases, the employment abroad was to be for a limited duration, and in some of them the taxpayers were restricted to military bases and were subject to military regulations. Under these circumstances the conclusion was reached that such taxpayers were merely transients or sojourners, rather than bona fide residents. The instant cases are also distinguishable from cases involving technicians working abroad under contracts to work for specific periods of time or to work on specific projects. Examples of these are Jones v. Kyle, (C.A. 10) 190 F. 2d 353, certiorari denied 342 U.S. 886; C. Francis Weeks, supra; Joseph A. McCurnin, 30 T.C. 143; and Ernest Rudolf Hertig, 19 T.C. 109.

We think the facts here presented clearly show that the petitioners were not mere transients or sojourners on the islands to which they were assigned, but were bona fide residents. The situation here presented is more nearly analagous to that obtaining in Swenson v. Thomas, supra; Audio Gray Harvey, supra; Leonard Larsen, supra; and Fred H. Pierce, 22 T.C. 493, in which the taxpayers were held to be bona fide residents of a foreign country. It may be added that here, as in the Swenson case, there was no want of good faith on the part of the petitioners. They were on the islands for a bona fide business purpose and not to evade taxes.

a Downs v. Commissioner, 166 F. 2d 504; Carl H. Thorsell, 13 T.C. 909 William B. Cruise, 12 T.C. 1059; Dudley A. Chapin, 9 T.C. 142; Ralph Love, 8 T C. 400, and Arthur J. H. Johnson, 7 T.C. 1040.

The respondent likens the case of the petitioner Matthew to that of the taxpayer in Moore v. United States, (S.D. Tex.) 180 F. Supp. 483, affirmed per curiam (C.A. 5) 289 F. 2d 926, in which it was held that the taxpayer was not a bona fide resident of Mexico. There the taxpayer, who was engaged in work in Mexico, provided a home for himself and his family in Texas near the Mexican border and customarily spent 4 days out of every 14, as well as vacations and holidays, with his family there, his work being usually within a radius of 100 miles from the home in Texas. The facts of that case would not justify a conclusion that Moore made his home even temporarily in Mexico, in the sense described hereinabove. Matthew, on the other hand, although owning a home in Florida in which his family lived, settled down at his post of duty for an indefinite time and made his home there temporarily, making periodic temporary visits to his home in Florida. We think the two cases are not parallel.

In view of the foregoing, we conclude that for each of the years in question each petitioner's compensation from Pan American is exempt from tax.

The petitioner Hill also raised the issue of the respondent's disallowance of certain personal exemptions for the years in question. On brief, however, he presses this issue only in the event of an adverse decision on the principal issue. Since we have held that Hill's compensation from Pan American is not taxable (and he had no other income in the years in question), the issue as to his right to deduction of personal exemptions is moot, and we express no opinion with respect thereto.

Decisions will be entered under Rule 50.

EDGAR S. IDOL and Katherine G. IDOL, PETITIONERS, V. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

SPEEDWAY TRANSPORTS, INC., PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

Docket Nos. 87888, 87889. Filed June 27, 1962.

1. Payments made by petitioner Speedway Transports, Inc., to petitioner Edgar S. Idol during 1956 and 1957 constitute dividend distributions.

2. The purported reacquisition of stock by Speedway in exchange for certain assets (an operating franchise and 15 pieces of equipment) during 1957 constituted a sale of assets.

3. Petitioner Edgar S. Idol's receipt of $40,000 on May 1, 1957, constituted a dividend distribution to him by Speedway.

Owen T. Armstrong, Esq., Henry C. Lowenhaupt, Esq., and Richard D. FitzGibbon, Jr., Esq., for the petitioners.

Robert A. Roberts, Esq., for the respondent.