Don C. Reser and Rebecca Jo Reser - Page 5

                                          5                                            
          and for petitioner personally.  The credit line funds went                   
          directly into DRPC's account, and any proceeds petitioner used               
          were drawn out of DRPC.                                                      
               Petitioner apparently did not make any repayments on the                
          notes to Frost Bank; DRPC may have made the only principal                   
          payments on the notes.  In 1989, pursuant to the guaranty                    
          agreement, Don Test apparently paid the balance of the notes.                
               Petitioner contributed $6,000 in capital to the formation of            
          DRPC in 1984.  Petitioner contributed an additional $11,045 to               
          DRPC during 1984.  The parties have stipulated that petitioner's             
          basis in DRPC as of December 31, 1984, was $5,362.                           
               During 1985, without considering the disputed loans to DRPC             
          from Frost Bank, the net effect of petitioner's withdrawals and              
          contributions to capital was a withdrawal of $801.  Petitioner               
          claimed losses of $37,890 from DRPC.  Such losses were not                   
          contested by respondent, causing losses in excess of basis as of             
          December 31, 1985, of $33,329.                                               
               Excluding respondent's disallowed Frost Bank loans, the net             
          effect of petitioner's withdrawals and contributions for 1986 was            
          a contribution of $43,579.  Petitioner claimed a loss of $23,942             
          from DRPC, which respondent did not contest.  There was                      
          accordingly a loss in excess of basis at December 31, 1986, of               
          $13,692.                                                                     








Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011