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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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