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On June 4, 1982, petitioner borrowed $130,000 from the
Hickman corporation profit-sharing plan (1982 plan loan). That
loan, which was unsecured, was evidenced by a note payable to
that plan and signed by petitioner (1982 note). The 1982 note
provided that interest on the 1982 plan loan was to be paid
annually at the rate of 15 percent per year, but it did not
specify a repayment date for that loan.
On January 4, 1984, petitioner purchased 20,000 shares of
stock of National Bank of Harrah at $12 a share. During 1984,
petitioner sold 200 shares of that stock. In July 1984, the
National Bank of Harrah stock was converted to common stock
(Harrah Bancshares stock) in Harrah Bancshares, a holding com-
pany. At the time of conversion, petitioner owned 19,800 shares
of Harrah Bancshares stock, or 20.43 percent of its outstanding
stock. From July 1984 through about April 6, 1993, petitioner
held varying amounts of Harrah Bancshares stock.
In an attempt to repay the 1982 plan loan, on August 19,
1985, petitioner transferred to the Hickman corporation profit-
sharing plan 5,000 shares of Harrah Bancshares stock (Harrah
Bancshares profit-sharing plan stock) and certain real property
located in Oklahoma County, Oklahoma (Hickman real property).
(Those transfers of 5,000 shares of Harrah Bancshares stock and
the Hickman real property shall be referred to collectively as
the 1985 stock and real property transfer.)
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