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Issue 18. Whether the Kanters Received Unreported Interest
Income from a Bank in 1988
OPINION
In the notice of deficiency for 1988, respondent determined
that the Kanters failed to report $349 interest income from
Merchants Bank and Trust Co.
Kanter's general ledger and audit file for 1988 do not show
that he received interest income from the Merchants Bank and
Trust Co. in 1988. He also testified that no interest was
received from Merchants Bank. There is no evidence that a Form
1099 was issued by Merchants Bank to the Kanters. On this record
we hold for the Kanters.
Issue 19. Whether Kanter Is Entitled to a Business Loss
Deduction in 1980 in Connection With the Sale of a Painting
FINDINGS OF FACT
The Kanters claimed a deduction of $104,231 on Schedule C of
their Federal income tax return for 1980. This deduction arose
out of a transaction involving a painting of George Washington
which was believed to be by the famous artist John Trumbull (the
painting). The painting was located in England. One of the
clients of Kanter's law practice, Richard Feigan (Feigan), was
interested in purchasing the painting but did not have the
resources to do so. Feigan contacted Kanter for Kanter's
assistance in directing him, Feigan, to someone who might be
interested in the painting and who could advance funds for its
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