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from ISI to the various partnerships. These documents were not
admitted as evidence. However, even if we were to accept these
documents as proof of partnership debts to ISI, petitioners have
not offered any documentation which would confirm that ISI owed
petitioners a similar amount. In an attempt to prove that such a
debt existed, petitioners offered ISI's general ledger as of
December 31, 1986, which reflects that payments were made from
ISI to petitioners and from petitioners to ISI. However, as of
the end of 1986, the general ledger shows total officer loans
payable of $12,070.15.8 Such a small debt to petitioners during
1986 does not support their claims that there was in excess of $1
million in loans that became worthless in 1987.
With regard to the $1,042,809.42 allegedly lent by
petitioners to the various partnerships via ISI, we find that
petitioners have not met their burden of proving that a bona fide
debt existed. The only evidence in support of petitioners'
argument is Mr. Bach's own self-serving testimony. No notes were
executed, no due date or interest rate was established, and no
security was offered or taken. Therefore, we deny all of
8The "Officer Loan Payable" account shows a number of
"loans" from Mr. Bach to ISI and shows payments either to Mr.
Bach or to other vendors on behalf of Mr. Bach. The beginning
balance of the Officer Loan Payable account is zero, and the
balance at the end of the year is $12,070.15. We also note that
many of the cash payments, which reduce ISI's payable to Mr. Bach
during 1986, were listed as payments for, among other things,
country club dues, a yacht, petitioners' Jaguar automobile, and
the automobiles of petitioners' daughters.
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