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records of WRI stated that these transactions had occurred. No
evidence was offered regarding the terms of these "loan backs".
E. Wise's and Eicher's Claimed Basis in WRI
Wise and Eicher claimed additional basis in WRI of (1)
$340,277 and $567,130 in 1984, respectively, as a result of WRI's
purchase of land from Hersco in 1984, and (2) $1.25 million each
as of July 31, 1987, as a result of their personal guarantees of
the HMC loan. In 1986, Wise and Eicher claimed increases in
their basis in WRI of $229,834 and $505,635, respectively, as a
result of the advances from Intent, which Intent made from the
$1.1 million it received from Westfield. As of July 31, 1987,
Wise and Eicher claimed a basis in WRI of $392,276 and $588,413,
respectively, relating to the Wesco loans. As of July 31, 1987,
Wise and Eicher claimed increases in their basis in WRI by $3,185
and $5,308, respectively, as a result of accrued interest on the
Hersco mortgage and Wise claimed additional basis in WRI of
$522,484 as a result of his "loan backs" to WRI. As of July 31,
1987, Wise and Eicher claimed a total basis in WRI of $2,236,140
and $2,813,047, respectively.
Wise received checks from WRI totaling $88,825 during WRI's
fiscal year 1988. WRI treated the $88,825 as a loan repayment on
its books and records and did not deduct that amount on its
fiscal year 1988 tax return. The Wises did not include those
payments on their 1988 tax return. Eicher received cash
distributions from WRI of $19,000 during WRI's fiscal year 1988.
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