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(b) Without receiving a reasonably equivalent value
in exchange for the transfer or obligation, and the
debtor:
(1) Was engaged or was about to engage in a
business or a transaction for which the remaining assets
of the debtor were unreasonably small in relation to the
business or transaction; or
(2) Intended to incur, or believed or reasonably
should have believed that he or she would incur, debts
beyond his or her ability to pay as they became due.
The record is void of any evidence to support a finding that
petitioner (who entirely controlled Jaussaud Enterprises) had the
requisite intent to satisfy section 3439.04(a) of the California
Civil Code. Petitioner lacked any knowledge of taxes or the
preparation of tax returns. He relied entirely on his accountant,
James Canny, for preparing his tax returns.
In addition, it is clear that petitioner did not understand
the tax consequences of the transfer of the Alhambra property from
Jaussaud Enterprises to himself followed by the sale to the third
party. Petitioner credibly testified that he caused the transfer
of the property to himself because he was told by the title company
that the title had to be in an individual's name for the sale to be
completed. When petitioner's accountant learned of the transaction
nearly a year later, the accountant told petitioner that he might
be indebted to Jaussaud Enterprises. The accountant told
petitioner to seek further tax advice. Nearly 3 years after the
transaction, petitioner executed a promissory note in favor of
Jaussaud Enterprises, apparently to prevent the appearance of a
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