- 458 -
pertaining to these and other similar adjustments in these cases.
The Court did not understand respondent's counsel, during the
trial, to have abandoned or conceded certain grounds in the
notice of deficiency disallowing the Kanters' claimed loss
deductions for 1987, including the grounds that the transactions
involved (1) were not bona fide transactions, or (2) were sales
made to related parties. Indeed, the Court finds the
"concession" argument surprising considering questions the Court
raised during Kanter's testimony. In its questioning, the Court
indicated that neither respondent nor the Court was necessarily
required for tax purposes to respect, as bona fide, transactions
labeled as "sales" that Kanter had arranged in order to claim
losses.
As to the adjusted bases the Kanters claimed, which
respondent challenged particularly in those situations where a
gain was reported, it was substantiated that Kanter had such
basis in each of the individual assets. As indicated previously,
funds from the Administration Co. special E and PSAC special E
accounts were Kanter's funds. In some instances, Kanter
testified that, although certain assets were acquired by him
through various nominees, the funds expended in the assets'
acquisition were payments that he made. In other instances,
Kanter paid for acquired assets by reducing the amount of
existing debts owed to him by the seller. Consequently, the
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