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to make business contacts and to provide funds for the bank
investors' needs. Petitioner borrowed $100,000 from South
Carolina National Bank to buy New-East Bank stock around 1987.
On their income tax returns for 1990 and 1991, petitioners
deducted the interest on that loan as a business expense.
Petitioner borrowed money from New-East Bank to pay farm
expenses.
Petitioner sold his New-East Bank stock for a loss of
$30,000 to $40,000 in 1994 or 1995.
E. Loans From Other Banks
In 1990 and 1991, petitioner paid interest on many loans.
The loans on which interest was paid, the deductibility of which
remains in issue after concessions, are listed in par. A-1 of the
opinion.
Petitioner used one of the two First American Bank loans in
dispute to buy the Bass Town tract. He used the other First
American Bank loan as a second mortgage on his satellite office
in Onslow County.
F. Petitioners' Finances and Bank Accounts
Mrs. McCullen had a personal checking bank account into
which she deposited her salary. Petitioner had a separate
personal bank account. He also had two farm bank accounts and
one account for his real estate business. His corporation had
one account. Petitioner used money from whichever account had
enough money to pay other business expenses. For example, he
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