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for the release of petitioners’ obligations to the financial
institutions. No vending machines were transferred to
petitioners in exchange for the Crestwood property.
It is significant that petitioners have failed to
substantiate their ownership of the vending machines. They have
not been able to demonstrate that through their proprietorship,
Vista Vending, they owned the vending machines leased from Ocean
Leasing and, thus, were entitled to claim depreciation.
Petitioners also argue that there were corporate agreements that
transferred ownership of the vending machines from their
corporations to them in the event that petitioners were required
to pay on their guaranties of corporate debt. Petitioners
contend that the records lost in connection with the floods
provided that petitioners would be entitled to the vending
machines if they paid corporate debts pursuant to individual
guaranties. Alternatively, petitioners allege the existence of
oral agreements that would have accomplished the same result.
Petitioners have also argued that their corporations did not
depreciate the vending machines as proof of the existence of the
oral agreements. In this regard, some of petitioners’
corporations’ returns are in the record. A review of those
returns reflects an inconsistent pattern where depreciation on
vending machines was claimed in some years and not in others.
This evidence is inconclusive.
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