Dudley B. and La Donna K. Merkel - Page 40

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          constitutes a liability for purposes of section 108(d)(3).                  
          Therefore, petitioners have failed to prove that either the                 
          Merkels or the Hepburns were insolvent on the measurement date              
          for purposes of section 108(a)(1)(B).  On that basis,                       
          respondent’s determinations of deficiencies are sustained in                
          full.                                                                       

                                                  Decisions will be entered           
                                             for respondent.                          

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