- 13 -
proceeds of the sale of the Yorkville building. Petitioners
argue that they have substantiated their interest expense.
To substantiate their interest payment on the Yorkville loan
petitioners rely on petitioner's testimony and an interest
statement. At trial, petitioner testified that, at the closing
of the sale on the Yorkville building, the interest on the loan,
which was in arrears, was paid from the proceeds from the sale.
Additionally, the record contains a copy of a statement from
First Midwest Bank/Illinois that states, in part: "the interest
paid on your loan account in 1988 was $74,722.55." Respondent
concedes that the loan account related to the Yorkville loan.
Based on the foregoing, we are satisfied that the interest on the
Yorkville loan was paid.
Respondent's contention that petitioners did not prove that
the proceeds from the sale of the Yorkville building were used to
make the interest payment is misplaced. Where there is no
allegation that the funds to pay the interest were borrowed from
the creditor, there is no requirement that the source of the
funds used to make the interest payment be traced. Respondent
has not cited, and we are unable to find, any authority to the
contrary. Consequently, the failure of petitioners to establish
that the sale of the Yorkville building produced sufficient
proceeds to pay off the Yorkville loan is immaterial. The only
fact petitioners must establish is that the interest on the
Yorkville loan was paid, and that fact is shown by petitioner's
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011