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in issue, Ruth Levitt drove new cars and had a comfortable
standard of living. Petitioners took regular vacations to Las
Vegas and Florida from 1963 to 1970.
2. Welev of Pinellas County, Inc.
In 1959, a Brooklyn lawyer named Erwin Weiss (Weiss), who
had helped organize Resyn, recommended that petitioners buy 41
acres of land in St. Petersburg, Florida. Petitioner, Ruth
Levitt, Fred Berger (Berger), a St. Petersburg realtor who knew
Weiss, and Weiss organized a group called Welev of Pinellas
County (Welev) to hold the 41 acres. Each owned a one-fourth
interest in Welev. In 1959, petitioner was president of Welev.
He signed the mortgage deed. Ruth Levitt knew very little about
Welev.
Weiss incorporated Welev around 1960. Welev issued 30
shares of stock when it was incorporated. The original
subscribers to the stock were petitioner, Berger, Meyer
Tepperman, and Weiss. Each had 7.5 shares.
In 1970, Resyn owed Hooker Chemical Co. (Hooker) about $2
million. Hooker supplied folacin hydride to Resyn. Petitioner
agreed to guarantee Resyn's debt. Petitioner pledged the Welev
property as collateral to Hooker.
In 1986, Welev sold its Florida property. Petitioners filed
separate returns for 1986. Ruth Levitt reported on her return a
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