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unpaid as of December 31, 1989. Sometime prior to December 31,
1985, Mr. Zaban lent James Donohue $10,000 in cash, which remained
unpaid as of December 31, 1989. During 1988, Mr. Zaban lent
Splenanne, Ltd. $4,623.87, of which $1,824 was repaid in 1989, and
the balance remained unpaid as of December 31, 1989. Mrs. Zaban
was not involved in any of these loan transactions.
E. Petitioners' Lifestyle
In 1978, petitioners acquired a home in Phoenix, Maryland, for
$96,899, which was financed through a mortgage. The property was
sold on February 1, 1990, for $185,000, with a $46,901 balance on
the mortgage. The mortgage payment on the Phoenix, Maryland,
residence was approximately $500 per month.
Following construction of petitioners' home in Lutherville,
Maryland, in mid-1989, the monthly mortgage payment became
$4,935.32, with a balloon payment of $445,213.99 due on October 1,
2003. Mrs. Zaban was aware of the mortgage payments on the home.
In 1989, petitioners furnished their home with $29,893.38 in
furniture from three stores and, in 1990, acquired a $12,800 Andy
Warhol painting. During 1989 and 1990, petitioners acquired
several other paintings, including: Lily Pond, appraised for
insurance purposes for $4,400; Flowers and Flowers, for $4,900;
Golden Teardrops, for $3,200 and appraised for insurance purposes
for $3,900; and Magical Vase, appraised for insurance purposes for
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