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Mr. Sabety was to receive a monthly payment of at least $250.
There is no further evidence in the record of this investment.
Since petitioner has failed to establish that the payments to Mr.
Sabety constitute his interest expense, the deduction is
disallowed.
For the year 1975 petitioner claimed interest expense paid
to Diesel Power in the amount of $137,500.17. Petitioner filed
an amended income tax return for 1975 reducing the interest
expense paid to Diesel Power by $41,245.39. Thus, the remaining
amount in dispute is $96,254.78.
Petitioner paid Diesel Power $125,000 on December 30, 1975.
In CTC's cash disbursements journal this amount is listed under
the transfer column and is noted "interest on loan drawn by Zand
since 1973." In 1978, when petitioner was attempting to
determine where he stood financially with Diesel Power, the
$125,000 payment was treated no differently than other CTC
transfers to Diesel Power. In addition, by filing the amended
return petitioner admitted that the claimed interest expense was
no more than $96,254.78. Moreover, he has presented no notes or
other loan documents evidencing a debtor-creditor relationship
between himself and Diesel Power.
Testimony was presented that petitioner borrowed moneys from
Diesel Power. However, this testimony was not specific with
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