- 30 -
did not refer to any portion of the $15,000 payment that Stephen
had made to her on November 29, 1982. However, she testified
that some portion of that payment was made with respect to that
transfer. Petitioner also omitted from the February 1987 letter
to Stephen the $5,000 amount forgiven that was stated in her for-
giveness letter to him dated December 20, 1982. In the February
1987 letter to Robert in which petitioner summarized the amounts
that she considered paid as of January 3, 1986, with respect to
the October 1982 note, petitioner omitted the $10,000 amount
forgiven that was stated in her unsigned forgiveness letter to
him. In addition, while petitioner transferred $100,000 to
Robert, the amounts forgiven stated in the forgiveness letters to
him and the $10,000 amount forgiven stated in the unsigned for-
giveness letter to him totaled $110,000.13
9. Whether the Manner in Which Each of the
Transfers at Issue Was Reported for Federal
Tax Purposes Is Consistent With a Loan
Assuming arguendo that each of the transfers by petitioner
to her sons had been a loan, a portion of which she forgave over
13 Petitioners attempt to explain the discrepancies involving
Robert by contending that petitioner did not intend the unsigned
forgiveness letter to him dated Apr. 9, 1983, to be effective.
However, petitioner led PKF to believe that that letter was
effective, since, based on information she provided to that
accounting firm, on Dec. 31, 1983, it recorded a $10,000 credit
to the "Note Receivable--B. Miller" account in petitioner's
general ledger.
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