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since then. From 1968 to the date of trial petitioner
significantly improved his poultry facilities, which he financed
with short-term unsecured loans from financial institutions.
Petitioner used the proceeds from his loans from New-East Bank,
Bank of Stanley, Southern National Bank, and First Citizens Bank
to finance his farm operations. Petitioner sometimes farmed on
real property that he had bought to resell but had not yet sold.
Petitioner's farming activities were profitable in 1990 and
1991. However, petitioner's farm had losses for several years
before the years in issue. He paid his farming expenses from any
of his bank accounts that had funds. He also borrowed money to
pay interest on loans. Petitioner did not keep records showing
how he used the proceeds of each loan.
Petitioner's only loan by wire transfer was from the Bank of
Stanley. Petitioner used the proceeds of that loan to pay farm
operating expenses.
In 1990, petitioner owned three tractors, a bail wagon, and
various implements such as plows, disks, a hay bailer, and a
rake. He financed the maintenance and replacement of equipment
with short-term unsecured signature loans from financial
institutions.
D. New-East Bank
Petitioner was a founder, original organizer, stockholder,
and director of New-East Bank. Petitioner, Godwin, and Jim Cain
(not otherwise described in the record) organized New-East Bank
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