Billie and Florence Lykins - Page 14

          Templeman, of his potential liability for Tag Coal's outstanding            
          employment taxes and that the loan was thus personal in nature.             
          Petitioner contends that this dominant motivation for making the            
          loan was to "keep the equipment working", thereby protecting J &            
          M's ability to lease, as lessor, such equipment to its clients.             
               Although petitioner's loan to Tag Coal undoubtedly benefited           
          Mrs. Lykins' son, Mr. Templeman, we do not think that the desire            
          to confer such benefit was the controlling factor in petitioner's           
          decision to make a loan to Tag Coal.  Rather, for the following             
          reasons, we think that the motivation for making the loan was as            
          articulated by petitioner and that such motivation was                      
          proximately related to his trade or business of leasing                     
               The IRS had informed Tag Coal that if the corporation did              
          not pay its outstanding employment tax liability, the IRS would             
          proceed against the assets held by J & M to satisfy such                    
          liability.  If petitioner had not loaned money to Tag Coal, and             
          if the IRS had proceeded against J & M's assets; i.e. the                   
          equipment, J & M would not have had equipment to lease to its               
          clients.  This would have effectively precluded petitioner from             
          carrying on his trade or business of leasing equipment.                     
               In addition, Tag Coal was the primary lessee and customer of           
          J & M.  Since petitioner is a 50-percent partner in J & M, we can           
          readily accept his testimony concerning his desire to "keep Tag             

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