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accrued interest was December 31, 1992, although Norager had the
right to pay all or part of the amount due before that due date.
During 1986, the Takaos lent Honkers Sound Co., Inc.
(Honkers), at least $102,000. Honkers operated a stereo store
and sold stereo equipment. Honkers ceased doing business during
1991. Honkers was owned by Henry M. Hong and Carol J. Hong.
In the Government's opening brief, respondent concedes that
the Takaos are entitled to a capital loss deduction for 1991 for
bad debt losses from loans to Honkers and Norager and to an
ordinary loss deduction of $12,500 for 1991 resulting from their
ownership of shares in Norager.
On May 20, 1986, Nakamura executed a promissory note on
behalf of Toraya Apartments wherein Toraya Apartments agreed to
pay Akiko or Yoshinori $100,611.60 with interest from that date
at the rate of 12 percent per year. The due date of the
promissory note was May 20, 1996, but Toraya Apartments had the
right to pay some or all of the amount due before that due date.
Investment Interest
In 1988, Nakamura wrote a check for $55,323.18 to Pier 29
from a "special account" that was in his name although the money
in the account belonged to Yoshinori. The check purportedly was
interest on a loan that arose from the purchase of an operating
license for the Capri Restaurant and certain furniture and
fixtures from Pier 29.
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