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The most significant dispute centers on petitioners’
contention that Gleave made numerous loans to Kenmore, and that
Kenmore’s payments to Gleave, or on Gleave’s behalf, were merely
repayments of these loans and thus not income subject to tax for
Gleave.
Gleave made a “soup sandwich” almost inevitable when he
determined to use Kenmore’s Account for his personal banking and
not keep personal records. In our Findings of Fact, we have
described two instances in which Gleave did deposit amounts into
Kenmore’s Account, and we concluded that certain payments to
Gleave or for Gleave’s benefit were not income to Gleave. Supra
1980--Not Income to Gleave. In the portion of our opinion
dealing with Kenmore’s gross receipts we examined and rejected
petitioners’ contentions as to the proceeds of the sale of Ted’s
Nursery (except for $6,600 per year) and the proceeds of Gleave’s
and his brother’s apparent inheritances from their grandmother.
We observed Gleave as he testified. We examined the
statements he signed under penalty of perjury in connection with
his and Kenmore’s bankruptcies, (1) as to his compensation from
Kenmore, (2) as to Kenmore’s not owing anything to him and not
repaying any loans during the preceding year.
The $550 per month payments on the purchase-money mortgage
from the sale of Ted’s Nursery require a different analysis. In
our analysis as to Kenmore, it was evident that, if the payments
were deposited to Kenmore’s Account, then Kenmore’s taxable
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