Stephen Bernard Schachner, Jr., and Jill Francis Schachner - Page 6

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               Petitioners also claim that they “are not the guarantor of             
          the loan.”  At trial, Mr. Schachner attempted to argue that since           
          he was not the “applicant”, the debt was not his.  However, the             
          simple fact remains that Mr. Schachner signed the Application &             
          Promissory Note, promising to be held jointly and severally                 
          liable for the debt.  He received the proceeds of the loan                  
          directly.  Further, the sole purpose in obtaining the loan was to           
          enable him to purchase a computer and further his education.6               
          Mr. Schachner’s attempt to avoid responsibility and place the               
          debt and its consequences solely with his mother-in-law is                  
          unavailing.                                                                 
               To the extent petitioners have made other arguments, the               
          Court concludes such arguments are without merit.                           
               As no exclusion applies and the debt was clearly Mr.                   
          Schachner’s responsibility, petitioners should have included                
          $7,807 of cancellation of indebtedness income in their gross                
          income on their 2003 tax return.                                            





               5(...continued)                                                        
          indebtedness, and the debt was not qualified real property                  
          business indebtedness.  See sec. 108(a)(1)(B), (C), and (D).                
               6  The Court finds it worth noting that, although he never             
          finished his degree, Mr. Schachner has been employed with                   
          Microsoft Corp. since 1999 and earns a substantial salary, no               
          doubt due in part to this education.                                        





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