Maurice D. and Elinor Taylor - Page 19

                                                    - 19 -19                                                      

             Commissioner, 51 T.C. 494, 497-498 (1968); Rev. Rul. 65-254, 1965-2                                  
             C.B. 50.8                                                                                            
                    Petitioner made repayments of at least $11,942 in 1988,                                       
             $33,693 in 1989, and $19,029 in 1990. These amounts were reported                                    
             on Forms 1098 sent to the IRS and petitioners by Irvington Federal.                                  
             The forms indicate that they are interest payments made pursuant to                                  
             the line of credit set up by Mr. Ottey to recover the losses from                                    
             the check-kiting scheme.  Mr. Ottey, however, testified that the                                     
             line of credit structure was only a bookkeeping mechanism to keep                                    
             track of both petitioner's restitution payments and Irvington                                        
             Federal's loss of interest income.  Mr. Ottey claims that his loan                                   
             officer mistakenly sent out the Forms 1098, and that the bank did                                    
             not report interest income to itself from any of petitioners'                                        
             payments.  Further, petitioner testified that he never agreed to a                                   



                    7(...continued)                                                                               
                                        *    *    *    *    *    *    *                                           
                                 (c) Limitation on Losses of                                                      
                          Individuals.--In the case of an individual,                                             
                          the deduction under subsection (a) shall be                                             
                          limited to--                                                                            
                                        *    *    *    *    *    *    *                                           
                                        (2) losses incurred in any                                                
                                 transaction entered into for                                                     
                                 profit, though not connected with a                                              
                                 trade or business * * *                                                          
                    8     A revenue ruling reflects the Commissioner's position                                   
             on an issue and is not binding on the Court.  See Stark v.                                           
             Commissioner, 86 T.C. 243, 250-251 (1986).                                                           




Page:  Previous  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  Next

Last modified: May 25, 2011