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payments totaling $76,361 and $19,139, respectively, to TexCommBk in
connection with his guaranty of this $705,000 loan.
On October 3, 1988, petitioner and TexCommBk entered into a
restructuring agreement under which several loans between petitioner
and TexCommBk and petitioner's liability as guarantor of the above
$705,000 loan were restructured. Under the restructuring agreement,
in full satisfaction of petitioner's liability as guarantor of the
$705,000 loan, petitioner agreed to pay $105,000 and other amounts to
TexCommBk and to assign to TexCommBk certain rent receivables. In
addition, two parcels of real estate that were held by Payne & Potter
were transferred to TexCommBk in further payment on the $705,000
loan.
For 1988, TexCommBk mailed a Form 1099 to respondent and to
Payne & Potter reflecting that Payne & Potter had realized discharge
of indebtedness income of $349,500 in connection with the above
restructuring agreement. This $349,500 apparently was calculated on
the basis of the unpaid principal balance of the $705,000 loan less
the $105,000 that petitioner agreed to pay TexCommBk and less the
value of the two parcels of real property that were transferred to
TexCommBk. The unpaid principal balance of the $705,000 loan and the
value of the two parcels of real property are not in evidence.
Payments Made to Banks
As indicated above, in addition to the deposits petitioner made
into his bank accounts, during 1987 and 1988, petitioner made
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