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Respondent concedes that Allied's income in 1989 should be
reduced by $1,700 to reflect loans to employees that were repaid
during 1989. Allied's argument is that all of the loans to
employees were repaid in the year that the loans were made and,
thus, that Allied's income should be reduced by the total amount
of the loans to employees in 1988 and 1989.
Allied's cash receipts and disbursements journals for 1988
and 1989 were introduced as evidence. None of the deposits were
either identified as loan repayments or traceable to particular
loans. Except for the $1,700 that was conceded by respondent, no
indication is given in the journals that any other loans to
employees were repaid during 1988 or 1989. Petitioner's general
and uncorroborated testimony is not sufficient to prove that
Allied's loans to employees were in fact repaid during the same
year that they were made, and the December dates of some loans
suggest otherwise. Respondent's determination regarding
adjustments to Allied's income, as modified by her concession,
will be sustained.
Allied also contends that respondent's determination of
Allied's expenses for the operation of petitioner's airplanes
should be increased by $2,000 and $14,675 in 1988 and 1989,
respectively. Respondent argues that Allied is not entitled to
additional airplane expenses.
For 1988 and 1989, Allied argues that it is entitled to
additional depreciation deductions related to petitioner's
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