William Whelpley, Jr. - Page 22

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             to assist CPI to develop the computer component and                       
             eventually to obtain an equity interest in CPI.  He                       
             testified as follows:                                                     

                  Very simply, I think we were advancing monies                        
                  for the use of CPI to develop its product and                        
                  we would eventually own part of CPI.  That was                       
                  our goal, was to own part of Communication                           
                  Processors, Inc.  That would be a product, the                       
                  company developed a product and that's what                          
                  we're interested in.                                                 

             Based upon Mr. Flaherty's testimony, we do not credit the                 
             statement contained in his letter of September 18, 1991,                  
             that Weeden made the subject advances "as loans, to                       
             Whelpley Associates, Inc. and yourself".  We find that                    
             Weeden made the subject advances either as loans to CPI or                
             contributions to CPI's capital.  Weeden issued the checks                 
             to WAI, but it did so on behalf of CPI, and it did not                    
             intend the advances to be loans to WAI or contributions                   
             to WAI's capital.                                                         
                  For the above reasons, we reject petitioners'                        
             position that WAI's income for 1987 should be reduced                     
             in the amount of $103,693, and, thus, we accept                           
             respondent's determination that the aggregate amount of                   
             Weeden's advances is includable in WAI's income in 1987.                  
             In reaching this result, we note that the record suggests                 
             that CPI constructively received the subject moneys from                  






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