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purchase. Kanter directed Feigan to another of his clients, a
Mr. Rappaport (Rappaport), who lived in Switzerland. Feigan and
Rapport thereafter agreed to a joint venture between them and,
through funds advanced by Rappaport, the painting was purchased.
After the purchase, it was discovered that the painting was not
by John Trumbull, and the seller agreed to a rescission of the
sale. The seller paid back to the joint venture the amount of
the selling price, but in British currency. That currency had
substantially declined in value against the U.S. dollar. A
dispute arose between Feigan and Rappaport. Rappaport insisted
that he be returned the full value, in U.S. dollars, of the funds
he had advanced, and Feigan, on the other hand, refused to do so.
Kanter was drawn into the dispute ostensibly because of the role
he had played in putting Feigan and Rappaport together. At
Kanter's urging, Feigan agreed to make Rappaport whole, and
Kanter contributed $104,231 toward the cause. Kanter claimed
this amount as a trade or business expense on his 1980 income tax
return, which respondent disallowed.
Kanter was not contacted by Feigan for legal services or
legal advice, nor was it contemplated that Kanter would be paid
for his services. Kanter was assisting two clients and friends
in a matter unrelated to Kanter's law practice or his activities
as a lawyer. There were no legal services provided by Kanter.
Kanter was not a party to the joint venture between Feigan and
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