- 9 -
construct the improvements.5 But that is contradicted by
petitioner's alleged journal on the Montrose property showing
that moneys were not spent in any amounts until after August 1,
1985.6 We are faced, therefore, with inconsistencies not only in
petitioner's testimony but also between his testimony and the
documents.
These are not the only weaknesses in the alleged Welch/Zurn
financial relationship. There are no indicia of a normal
debtor/creditor relationship supporting petitioner's version of
the facts. There were no notes, no due dates or payment
schedules, and no stated rate of interest.7 Indeed, at the
trial, while both petitioner and Mr. Zurn testified that
5 We have tried in vain to correlate the checks from Mr.
Zurn that were deposited in the Montrose property account with
the expenditures listed on the alleged journal on the Montrose
property.
6 Respondent objects to Exhibit 44AR, which was offered as
a record of Mr. Zurn's advances to the Montrose property. The
only reference that may be to Mr. Zurn is an ambiguous notation
on page 2 of Exhibit 44AR that reads "$202.31 - 18 Dec. - 15 shts
3/4 CDX Grossman's - pd by Stan Zurn". We do not accept that
this was a contemporaneous record of funds allegedly borrowed by
petitioner. We do admit the exhibit as a record created by
petitioner, but we have little confidence in the document as
being a record of loans from Mr. Zurn to petitioner.
7 Petitioner argues that the interest rate at the beginning
was 6 percent and then was changed to 17.136 percent, as
evidenced by a notation on the alleged journal on the Montrose
property. The reference in the journal reads "Feb. 21, 85 to
B.W. 17.136%." Whatever this may refer to, we do not believe
that it relates to the interest that petitioner was expected to
pay. We note further that petitioner did not claim any deduction
for interest on his 1986 tax return.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011