- 27 - Moreover, by securing the cap loan, petitioner was able to raise the money necessary for the opening of the auto dealership. Thus, in total, petitioner personally contributed approximately $806,000 to the auto dealership. This investment was substantial in nature. At the inception of the auto dealership, petitioner secured a $2.5 million floor plan arrangement to acquire inventory (automobiles). Initially, petitioner was not required to personally guarantee the floor plan arrangement. It was not until July 31, 1988, that petitioner personally guaranteed the floor plan loan. By that time, the floor plan amount had increased significantly, permitting the auto dealership to have an expanded inventory base. The record, generally, reflects that petitioner's dominant motivation was as an investor. His motivation in guaranteeing the floor plan loan was to protect his investment in the business of the auto dealership, as opposed to protecting his trade or business as an employee. Finally, in 1989, Sanwa Bank was concerned that the floor plan amount was "out of trust" and requested that petitioner decrease the outstanding loan. In the process, Sanwa Bank received a $400,000 security interest in petitioner's home. Sanwa Bank received $400,000 from the March 2, 1990, sale proceeds from petitioner's home. Again, petitioner's dominantPage: Previous 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 Next
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