- 57 -
March 3, 1986 letter indicated that Union Bank was "pleased to
have the opportunity to accommodate this valued Group customer
[petitioner] and will entertain all reasonable requests."
The loans to Radcliffe and to BOT by Union Bank that are at
issue in these cases did not provide that bank with an opportuni-
ty to make a profit.
IV. Transaction Involving Horbury
During relevant periods, Horbury Holdings B.V. (Horbury),
which was incorporated in the Netherlands in 1982, was a sub-
sidiary of Asselwell Mondial N.V. (Asselwell), and Asselwell,
which was incorporated in the Netherlands Antilles, was a sub-
sidiary of a foreign subsidiary of Pioneer.
BOT claimed a deduction of $151,722 for interest paid to
Horbury in its 1984 Federal income tax return.
V. Income or Loss Reported by Radcliffe
and by BOT for the Years at Issue
In their Federal income tax returns (income tax returns) for
the years at issue, Radcliffe and BOT reported the following
amounts of taxable income or loss:
Year Radcliffe BOT
1984 ($809,615) $93,026
1985 (835,080) (168,669)
1986 (894,322) (310,024)
The foregoing results reported by Radcliffe and by BOT were
generated in part by deductions for interest paid that they
claimed in their respective income tax returns for the years at
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