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We also reject petitioner's contention that he received a
loan totaling $2,953,000 from the Ben-Jabr family in 1988 to
satisfy a mortgage on property he owned in Maine and to satisfy
his divorce settlement obligation. The record in this case
contains no credible evidence of the existence of a loan. For
instance, there is no evidence of any note, written loan
agreement, fixed payment schedule, request for collateral,
interest charge, demand for repayment,14 or reflection of the
transaction as a loan in the parties' records. See Frierdich v.
Commissioner, 925 F.2d 180, 182 (7th Cir. 1991), affg. T.C. Memo.
1989-393; Busch v. Commissioner, 728 F.2d 945, 948 (7th Cir.
1984), affg. T.C. Memo. 1983-98.
14Petitioner argues that he repaid approximately $1.2
million of the alleged loan with insurance proceeds that he
received as a result of a fire that destroyed his house in 1993.
Petitioner contends that he transferred funds to an account held
by the Estate of Abdul Aziz Ben-Jabr at the Credit Lyonnais Bank
in Switzerland. In support of his position, petitioner relies
upon the following evidence of wire transfers from the Plaistow
Bank & Trust Co. (Plaistow) (account number 02120186) in
Plaistow, New Hampshire. One wire transfer in the amount of
$700,000 was dated Nov. 1, 1993, and stated: "wire transfer to
Estate of AA Ben Jabr, plus fee" A second wire transfer in the
amount of $300,000 was dated Apr. 11, 1994, and stated: "wire
transfer to Credit Lyonnais (Schweiz) AG Zuerich-Estate A.A. Ben
Jabr". The third document is a wire request form in the amount
of $225,000 and dated Mar. 3, 1995. This form stated that the
transfer was to be made to an account named "Estate of A.A. Ben
Jabr" (account number 08-05866.1). However, this evidence does
not constitute proof of a loan repayment. Instead, it only shows
that, at most, petitioner transferred approximately $1.2 million
to an account that was created in the name of the Estate of Abdul
Aziz Ben-Jabr. Indeed, although they had ample opportunity to do
so, neither petitioner nor Fallah Ben-Jabr presented any
documentary evidence establishing that the Ben-Jabr family had an
account at Credit Lyonnais.
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