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respectively, to either IRA or Int'l Films. CMB Cinema Ventures
no longer owed $250 to either IRA or Int'l Films. Likewise,
Ballard's and Lisle's grantor trusts' original "loans" totaling
$357,464 were no longer owed to IRA or Int'l Films.
In 1987, Ballard reported $2,400,252 total income on his
Federal income tax return. Included in the $2,400,252 was
$212,309 interest and dividend income and $1,018,367 capital gain
income. In 1987, Ballard had the resources to pay either IRA or
Int'l Films the "loans" owing by him and his grantor trusts. In
1987, when IRA wrote off Ballard's "receivable" as worthless,
Ballard did not report the discharge of this indebtedness as
income on his 1987 return or on subsequent returns.
In 1987, Lisle reported $746,923 total income on his Federal
income tax return. Included in the $746,923 was $255,707
interest and dividend income. In 1987, Lisle had the resources
to pay either IRA or Int'l Films the "loans" that he had received
individually and through his trusts. In 1987, when IRA wrote off
Lisle's "receivable" as worthless, Lisle did not report the
discharge of this indebtedness as income on his 1987 return or
subsequent returns. In 1988, the year after IRA wrote off loans
owing by Lisle and his trusts (RWL Cinema, RWL Cinema II, and
Basking Ridge), IRA made another "loan" to the RWL Cinema Trust
in the amount of $6,000. In addition, KWJ, Inc., or Kanter
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