Ramon A. Garcia and Bertha E. Garcia - Page 23

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             regular course of dealing was established prior to the                   
             years before the Court.                                                  
                  Based on the foregoing, we find that petitioners                    
             have failed to prove that the 1986 loans were renewed,                   
             renegotiated, modified, or extended after 1986 within                    
             the meaning of the 1986 Act effective date provisions.                   
             We therefore hold that the level amortization requirement                
             contained in 1986 Act is not applicable to such loans.  Cf.              
             Hickman v. Commissioner, T.C. Memo. 1997-545.  Hence, the                
             interpretation of that provision contained in the proposed               
             regulation, discussed above, on which petitioners rely, is               
             not applicable to the 1986 loans.  Accordingly, we sustain               
             respondent's determination that the outstanding balance of               
             the 1986 loans as of December 31, 1991, constitutes a                    
             distribution of plan assets to petitioners in 1991.                      

             Unpaid Interest Accrued During 1990 and 1991                             
                  Respondent treats the unpaid interest that accrued                  
             during 1990 and 1991 on all of the loans, other than the                 
             1986 loans, as distributions of plan assets in those                     
             respective years.  These amounts consist, either entirely                
             or in substantial part, of interest that accrued after the               










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