- 17 -
23 T.C. 527, 531 (1954). The fact that a creditor has failed to
remove a debt from its books does not mean that the debt has not
been canceled. Exchange Sec. Bank v. United States, supra.
Based upon the principles set forth above, we must conclude
that an identifiable event fixing with certainty the discharge of
part of the original loan did not occur in 1987. At the same
time they modified the original loan, InterFirst agreed to
provide Briarpark the additional build-out loan in the amount of
$1,500,000 for tenant improvements.
We are not convinced that converting the undersecured
original loan from a recourse to a nonrecourse debt constitutes
an identifiable event. See Zappo v. Commissioner, 81 T.C. 77, 87
(1983). Petitioner has not established that the conversion of
the debt made it highly unlikely, or impossible to estimate,
whether and when the debt would be repaid. Commissioner v.
Tufts, 461 U.S. 300 (1983); Gibson Prods. Co. v. United States,
637 F.2d 1041, 1047 (5th Cir. 1981). In our view, InterFirst's
willingness to make the build-out loan indicates its belief that
the tenant improvements would increase the value of the property.
Moreover, InterFirst increased the lien securing the original
loan according to the agreed modifications. Such actions are not
consistent with discharging the loan. The totality of the
circumstances leads us to believe that InterFirst still intended
to enforce its rights in 1987. In addition, petitioner does not
point to any identifiable event indicating Briarpark's
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Next
Last modified: May 25, 2011