World of Service, Inc. - Page 9

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           when they decorated the beach condo.  The Johnsons lent her                
           approximately $45,000 of corporate funds because she was having            
           financial difficulties.  Mr. Johnson's instructor-trainer                  
           (personal trainer), Kent Oaks, was also having financial                   
           difficulties, and Mr. Johnson lent him about $2,500.  Finally,             
           Ed Rector was a person Mr. Johnson had met in connection with              
           Glen Turner's activities.  Mr. Rector, who was then involved in            
           litigation, borrowed over $10,000 from Mr. Johnson.  No efforts            
           were made to collect these loans during the years under                    
           consideration.  Respondent disallowed these items due to Mr.               
           Johnson's failure to show that they were debts and that they               
           became worthless.                                                          
             For 1982, Service deducted $7,190 for fees incurred in                   
           representing the Turner family children's trust, of which Mr.              
           Johnson was trustee, before the Internal Revenue Service.                  
           Respondent disallowed the deduction for lack of a business                 
           purpose.  For 1983, Service deducted $5,194 for fees, of which             
           $2,777 was disallowed for lack of business purpose because it              
           represented fees for a partition suit by Mrs. Johnson.  For                
           1984, Service deducted $32,185 of legal fees, and respondent               
           disallowed $14,988, as representing some personal legal matters            
           of Mrs. Johnson and Ed Rector.                                             
             Service, for 1982, 1983, and 1984, deducted depreciation                 
           totaling $7,130, $11,773, and $25,197, and respondent                      
           disallowed $5,430, $10,073 and $24,397 as attributable to                  




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