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threatened margin calls, but even after the value of the stock
increased substantially, it was not returned to Drachman.
As previously stated, petitioner testified that the sole
reason shares of Price Co. stock were transferred to him in
October and December 1987 was to cover threatened margin calls.
The acquisition of these additional shares, petitioner testified,
would allow him to meet the margin calls without forcing him to
sell shares of Price Co. stock already in his account.
Petitioner's purported goal, therefore, was to save, and not sell
off, the Price Co. stock. Based on petitioners' spending habits,
as described above, we are persuaded that petitioners had little
concern about maintaining their Price Co. stock, as they
methodically depleted the equity in their account each month with
extravagant purchases.
After the stock rose, Drachman, the supposed creditor in
these transactions, never made any demand on petitioners for
repayment, even though the value of the stock had increased
substantially and petitioners were diminishing the stock with
spendthrift habits. Petitioner testified that no demand was
made, and no amount repaid, because "[Drachman] would prefer for
[petitioners] to put a little bit away for [their] * * * children
and their education than pay him back right now." This would not
be the standard posture of a creditor in a bona fide loan. We
believe Drachman did not expect to be repaid.
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