Frank Petar Contracting, Inc. - Page 9

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          supporting a tax deduction for that year.  Both he and Mr. Petar            
          had believed that payment by check within 2-1/2 months, as                  
          planned, would be sufficient for that purpose.  In Mr. Cunniff’s            
          view, it was just a fortunate coincidence that petitioner issued            
          the Note in time to qualify for a deduction for FYE 5/31/90.                
               The Witness:  * * * The note came about because back                   
               in, I don’t know when, it was -- I think it was tax                    
               season still * * * Mr. Petar needed some bonding, okay,                
               performance bonds, because he has his own personal land                
               over there that he was going to put a project in on.                   
               What happened is that we met sometime early in May when                
               we did this.  At the time Frank told me he needed a                    
               financial statement, his personal financial statement,                 
               because of the bonding company.  I think it was Aetna                  
               or whatever.  Okay.                                                    
                   So I made him up a personal statement.  On the                    
               statement I showed a receivable on his asset statement                 
               of $100,000.  Frank and I talked, and when this                        
               occurred, Frank had called me and said after I gave him                
               this statement that we should show something in the way                
               of substantiating this because -- I guess -- I have                    
               never gone through bonding myself but I guess they ask                 
               you everything on your thing, they want to know, you                   
               know, where this came from and everything.                             
          *   *   *   *   *   *   *                                                   
               * * * we drafted up this note just for something to                    
               send with this financial statement to show that there                  
               was a $100,000 asset that was actually due and payable                 
               to Frank very shortly.                                                 
          *   *   *   *   *   *   *                                                   
               The Court:  Now why would Mr. Petar get personal                       
               bonding if he was doing business as the corporation?                   
               The Witness:  Because this is -- this is personal                      
               property that he owned.  This wasn’t land in the                       
               corporation.                                                           






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Last modified: May 25, 2011