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establishing whether he or his family "indirectly" held less than
a 50-percent interest in the parent company. Accordingly, we
sustain respondent's determination that the Kanters are not
entitled to a loss deduction for the Victorian Village note sold
to MAF in 1987.
Similarly, with respect to the Windy City transactions,
involving sales to Windy City of stock in Flexible Computer,
IHOG, and notes owing by Arlington Carpentry, Classic Custom
Furniture, Pam Osowski, R Trust, and Tanglewood, we conclude that
Kanter failed to meet his burden of proof to establish deductible
losses. As a threshold matter, Kanter failed to prove that Windy
City was not a related party under section 267(b)(2) and (c)(2).
We note that some of these transactions were for nominal amounts,
and that the Bea Ritch Trusts (which trusts were established by
Kanter's family) owned all of Windy City's shares. Earlier, in
this opinion, we held that Kanter was the deemed grantor of the
Bea Ritch Trusts during 1987, and the beneficiaries were members
of his family. Therefore, Windy City was clearly a related party
to Kanter. Moreover, Kanter failed to prove that each of the
transactions was bona fide. The named trustee of the 25 BRT
trusts was Weisgal, a longtime friend and business associate of
Kanter. Windy City's president was Joel Kanter, Kanter's son.
For the foregoing reasons, we sustain respondent's determination
that the Kanters are not entitled to loss deductions on these
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