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Shepherd either paid or was obligated to pay any amount on the
Salesian obligation during the years in question, and we so find.
We reach a similar conclusion with regard to the first Kasa
obligation. We are aware, of course, of the consolidation
agreement, entered into by Kasa and Good Shepherd, and purporting
to consolidate the mortgages securing the first and second Kasa
obligations. Nevertheless, we have no evidence that Good
Shepherd ever assumed the first Kasa obligation, and we have the
Litas assumption, whereby Litas did assume the first Kasa
obligation. As with the Salesian obligation, we are not
convinced that Good Shepherd either paid or was obligated to pay
any amount on the first Kasa obligation during the years in
question, and we so find.
The second Kasa obligation was executed by Good Shepherd.
There is no evidence of an assumption by Litas. To be entitled
to a deduction for interest paid or accrued on the second Kasa
obligation, petitioners have the burden of showing that the
indebtedness is genuine. In the stipulation of facts entered
into by the parties, respondent stipulated to copies of the
second Kasa obligation and second Kasa mortgage. Respondent
added, however, that she did not stipulate that those documents
had any legal substance or represented a bona fide debt incurred
by Good Shepherd. Beyond petitioners' promissory note to Kasa,
petitioners have introduced no evidence, such as bank statements
or other documents, to show that any sum actually was received by
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