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Brian was in default. This indicium supports a finding that
there was no bona fide debt.
h. Failure To Pay or Seek a Postponement
Brian testified that he repaid "a little bit" of the
transfers, "approximately $3,000". He further testified that he
made no repayments in 1992, 1993, or 1994. Supposedly a small
repayment was made in 1995, and then only after he became aware
that there might be "a problem" with the "loans". Brian made no
effort to seek a postponement of payment on the alleged
liability. Wayne testified that he had repaid only "a few
thousand dollars". He had no idea of when these repayments were
made. Wayne also made no effort to seek a postponement of
payment on the alleged liability. This indicium supports a
finding that there was no bona fide debt.
i. Conclusion
On the basis of our review of all relevant factors, we find
that the 1992 and 1993 transfers from the Plan to petitioners
were taxable distributions and not loans.
II. Distributions From Wayne's IRA
Respondent determined that Wayne received taxable
distributions from his IRA during 1993 and 1994 in the amounts of
$9,000 and $9,307, respectively. In his petition, Wayne contends
that he did not receive taxable premature distributions from his
IRA. In his response to respondent's request for admissions,
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