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trusts was generally reportable on Kanter's individual Federal
income tax returns.
Kanter did not present any evidence to establish the
genuineness of the alleged indebtedness represented by the notes.
No true debtor-creditor relationship existed; there was no
intention to repay, and there was no business purpose for any of
the notes.
2. Sale of Cashmere Stock to Waco
On July 12, 1983, the BWK Revocable Trust and the Everglades
Trusts 1-5 sold all of their respective stock (common and
preferred shares) in Cashmere to Waco Capital Corp. (Waco). Waco
was a corporation organized under the laws of Delaware, and
Meyers was its president. The sole shareholder of Waco was the
Bea Ritch Trusts. Waco later changed its name to Windy City,
Inc., and continued to be owned (in whole or in part) by the Bea
Ritch Trusts.
The BWK Revocable Trust entered into an agreement with Waco
whereby the trust agreed to sell its 50 shares of common and
241.274 shares of class A preferred stock of Cashmere for a
promissory installment note in the amount of $290,000.
Similarly, the Everglades Trusts 1-5 entered into an agreement
with Waco whereby the trusts agreed to sell their 400 shares of
common and 257.226 shares of class A preferred stock of Cashmere
for a promissory installment note in the amount of $657,000.
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