Investment Research Associates - Page 482




                                       - 529 -                                         
               In view of the foregoing, IRA is not entitled to any                    
          deductions, credits, or losses associated with these purported               
          transactions.                                                                
          G.   Equitable Leasing                                                       
               This is another computer leasing transaction purportedly                
          engaged in by IRA.  A reference is made to it in the summary                 
          schedules of a witness for IRA.  While respondent does not agree             
          with the numbers delineated in the summary schedules, it appears             
          that this transaction was considered in computing the tax                    
          liability of IRA for the taxable year ended December 31, 1980.               
          No facts to support the basis for the income, deductions,                    
          credits, or losses, which apparently were claimed in connection              
          with this transaction, were presented by IRA.  Since IRA had the             
          burden of proof on this issue, we sustain respondent's                       
          determinations of disallowance with respect to this transaction.             
               Finally, the long-term promissory notes executed by IRA to              
          finance the purported computer sale and leaseback transactions do            
          not constitute valid indebtedness because there was little                   
          possibility that IRA would ever be required to make the payments             
          due.                                                                         
               IRA's long-term promissory notes in these various                       
          transactions were neither unconditional nor enforceable.  They               
          are not unconditional because the promise to pay in most of the              
          notes was expressly contingent, by virtue of the deferral                    






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