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Angelo testified that it was common for him to advance to
the other owners the funds to pay the expenses on a property. He
further testified that he treated the advances as loans and
interest accrued on the advances.8 Angelo also stated that he
does not pursue collection on these loans actively. For example,
Angelo testified:
I got a call a few days ago from a fellow by the
name of Sammy C. Actually, not him, got a call from an
agent that says “Hey, Sammy has on his financial
statement that he owes you money from 1985.”
But Sammy was–-couldn’t pay for a long time.
“Well, is he going to pay you?”
“Yeah, he’ll pay me.”
“When?”
“Well, when he can.” He’s not a relation or
anything. I’ve never filed a lawsuit against him. He
has sufficient money for me to go after him but I’m not
going to break the guy to collection a few hundred
thousand dollars.
In addition, petitioner testified that he considered the
advances to be loans that he still owed and intended to pay back.
Upon the basis of the record, we find the amounts advanced to
petitioner by Angelo still owing. Therefore, we hold that
8 Angelo’s accountant, Mark Enes, further testified that
Angelo did not favor petitioner on the interest rate charged to
petitioner.
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