6
During 1987, the net effect of petitioner's withdrawals and
contributions to DRPC, excluding the contested amounts,1 was a
contribution to capital in the amount of $50,546. Petitioner
claimed losses in 1987 from DRPC in the amount of $257,354, of
which $36,855 was allowed by respondent. Excluding the contested
amounts, petitioner's basis as of December 31, 1987, was zero.
During 1988, the net effect of petitioner's withdrawals and
contributions to DRPC was a withdrawal of $11,279. Petitioner
claimed a loss in 1988 of $333,581. Respondent disallowed the
whole loss on the grounds that there was no basis during 1988 to
support such loss. The disallowed amounts for 1988 consist of
guaranty fees allegedly paid to Don Test in the amount of
$43,106, and loan proceeds from Frost Bank in the amount of
$12,580. With such amounts disallowed, petitioner's basis in
DRPC was zero at December 31, 1988.
Petitioner filed for bankruptcy in 1991. No loans to the
corporation by petitioner were reflected on his bankruptcy
schedules. Nor were any such loans reflected on the amended
final decree of divorce and division of property between
petitioner and petitioner wife.
1 The contested amounts in 1987 are $38,501, which were the
alleged guarantee fees paid to Don Test from Don C. Reser, P.C.,
and $172,457, which was actual loan proceeds from Frost Bank.
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