Maurice D. and Elinor Taylor - Page 17

                                                    - 17 -17                                                      

             Irvington Federal and petitioners so as to convert the check-kiting                                  
             scheme to a debt arrangement.           Consequently, we hold that the amount                        
             of the bounced checks--the amount of the loss Irvington Federal                                      
             sustained--must be included in petitioners' income.                                                  
                    We now turn to the amount that must be included in                                            
             petitioners' income; i.e., the amount of the bank's loss.                                            
             Petitioners assert that Irvington Federal suffered approximately                                     
             $170,000 in losses from petitioner's check-kiting scheme.                                            
             Respondent claims that the losses totaled $280,698.  These amounts                                   
             are at the opposite ends of the range stipulated in petitioner's                                     
             plea agreement with the U.S. Attorney's Office with respect to the                                   
             cash-structuring charge.                                                                             
                    Petitioner claims that $170,000 is the correct amount because                                 
             that is the amount reflected in the confessed judgment promissory                                    
             notes and mortgages executed by the parties in July 1988.                                            
             Additionally, petitioner testified that when he presented Mr. Ottey                                  
             with the spreadsheet of his check-kiting activity, he told Mr.                                       
             Ottey that the total losses were approximately $163,000.                                             
                    Mr. Ottey testified that Irvington Federal suffered a $280,000                                
             loss and that $170,000 represented the maximum Irvington Federal                                     
             could secure from petitioners' assets on foreclosure.  Mr. Ottey                                     
             claimed that the balance of the losses, $110,000, was written off                                    
             by the bank and placed in a loss reserve account.                                                    







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