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the contribution. Petitioner testified as follows regarding
these bank accounts:
Well, [the] claims [account] was strictly a function
where we received funds from clients to administer and
pay their employee benefit plans. The monies flowed
from the employer through our system and bank directly
to employees and providers. The other account, or the
premium account, was a collection account where we were
doing billings to employers, collecting premiums, and
remitting net premiums, which are premiums minus
commissions and fees, expenses, to insurance carriers.
So one went from employer to insurance carriers and one
went from the employer to providers.
Petitioner's testimony indicates that these accounts were flow-
through accounts, perhaps even trust accounts. The funds were
collected from one source and paid to another. If this is so,
whatever funds were in the accounts at the time of transfer were
subject to the corporate liabilities to the designated
distributees of the funds. Petitioners have not presented any
evidence that these funds actually had a basis to petitioner, net
of liabilities, when he transferred them to GAPS. We conclude,
therefore, that petitioner's basis in GAPS cannot be increased by
the amounts of the two bank accounts.
Petitioner also claims to have lent $100,000 in furniture
and equipment to GAPS. We have already found, supra p. 23, that
petitioner has failed to prove that he lent this property to
GAPS. Although we believe that petitioner transferred the
furniture to GAPS, petitioner's basis in GAPS cannot be increased
by any amount for this contribution, because he has not proven
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