- 8 -
(1982); Lazore v. Commissioner, T.C. Memo. 1992-404, affd. in
part and revd. in part 11 F.3d 1180 (3d Cir. 1993).
Under section 7873, income derived by a member of an Indian
tribe "directly or through a qualified Indian entity" from a
"fishing rights-related activity of such tribe" is not subject to
income tax. For purposes of section 7873, income derived from
"fishing rights-related activity" means income derived from
activity "directly related" to harvesting, processing,
transporting, or selling fish in the exercise of recognized
fishing rights of an Indian tribe. Sec. 7873(b).
In order for petitioner's argument to prevail, we must find
that his discharge of indebtedness income is derived from
activity "directly related" to harvesting, processing,
transporting, or selling fish in the exercise of recognized
fishing rights of an Indian tribe. To make that determination,
we must examine the nature of petitioner's income.
The income at issue results from petitioner's discharge of
indebtedness for funds he borrowed in part to purchase property
with which to engage in fishing-rights-related activity. In or
around 1993 petitioner's creditor seized collateral to satisfy
part of his unpaid loan amount. In 1993 the BIA paid off
petitioner's debts to the original lenders pursuant to, we
presume, the terms of the Indian Loan Guaranty and Insurance
Fund. See Indian Financing Act of 1974, Pub. L. 93-262, sec.
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