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Petitioners' own course of conduct belies their efforts to
lead us to believe that on December 26, 1989, they placed a debt
instrument in the hands of their 100-percent owned corporation
that they actually intended to honor under all circumstances.
Notwithstanding the fact that this case was submitted fully
stipulated, petitioners nevertheless bear the burden of proving
that they intended to and did create genuine indebtedness. Rule
142(a); see Rule 122(b); Service Bolt & Nut Co. Trust v.
Commissioner, 78 T.C. 812, 819 (1982), affd. 724 F.2d 519 (6th
Cir. 1983). This they have failed to do.
The parties stipulated that as of December 31, 1989,
petitioners had a net worth far in excess of the $5,841,436
consolidated net worth of NAC Corporation, WSA, and NALICO. It
may therefore be presumed that, had they chosen to do so,
petitioners could have funded the disputed excess of liabilities
over basis by means other than an unsecured promissory note,
which, as events transpired, cost them nothing in terms of cash
layouts for over two years after their December 26, 1989,
contribution of the Capital Note to NAC Corporation.
As previously stated, the Capital Note contained
petitioners' unconditional promise to pay NAC Corporation
interest at the rate of 11 percent per annum in monthly
installments (presumably $9,716.67 monthly) commencing February
1, 1990, and continuing until January 1, 1995. Despite the
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