Myer B. Barr and Estate of Diana L. Barr - Page 5

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          reported $1,093,778 of capital gains on their 1993 Federal income           
          tax return.                                                                 
               When petitioner purchased the note, he did not consult with            
          any advisers or perform any independent research regarding Super            
          City Meats.  Furthermore, when petitioner purchased the note, he            
          had no knowledge of the murder of Stephen's business partner or             
          the alleged problems with the Chinese mafia.  Jeffrey continued             
          to manage the note, and Stephen was not informed that petitioner            
          had purchased it.                                                           
               In February 1992, Stephen was indicted for the July 1990               
          murder of his business partner.  The indictment against Stephen             
          was not dismissed until August of 1993.  As a consequence of                
          defending himself against the criminal indictment, Stephen                  
          "didn't have a dime."  In 1993, Stephen was unemployed, he and              
          his wife were provided living expenses by his mother-in-law, and            
          he carried in excess of $100,000 of credit card debt.                       
               The insurance companies refused to pay on the policies of              
          Stephen's murdered business partner.  The insurance proceeds were           
          never paid to Super City Meats or any of its representatives.               
               On September 30, 1993, Stephen acknowledged in a letter to             
          Jeffrey that he did not have the current ability to repay the               
          advance and the required interest.  On October 11, 1993, Stephen            
          further acknowledged in a letter to Jeffrey that it was unlikely            
          he would ever have the resources to repay the debt.                         
               On their 1993 Federal income tax return, petitioners claimed           
          a nonbusiness bad debt deduction of $100,000.  The burden of                

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