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between entities with no documentation to establish a rationale
for such transfers. He created phony loans that were eventually
written off, and then he or the corporations took bad debt
deductions to offset additional income.
Similarly, Lisle, Ballard, and Kanter failed to recognize
any separate identity of Carlco, TMT, and BWK, Inc. Petitioners
assert that Lisle, Ballard, and Kanter were only the respective
managers of the assets of Carlco, TMT, and BWK, Inc., and claim
that the preferred stock issued to their family trusts had
minimal value. The record clearly shows, however, that
petitioners' control over the assets of the corporations went far
beyond that of a manager.
Petitioners used the funds for their personal benefit. From
1984 to 1986, Ballard transferred $16,599 to himself that was
recorded as a receivable on TMT's books. In 1987, Ballard
transferred the St. Francis Arkansas land owned by TMT to himself
and recorded the transfer as a sale. He did not pay for the land
but recorded a receivable of $100,000 as owed by him on TMT's
books. In 1987, TMT funds also were used to pay $20,344 to the
Fairfield Plantation Company, Ballard's S corporation. The
payment was recorded as a receivable owed by Ballard. In 1989,
Ballard distributed $10,000 to himself from TMT and increased his
receivable to $146,943. In addition, Ballard distributed
$160,000 of TMT's funds to his wife, $122,900 to the Seabright
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