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same note that Kanter subsequently "sold" to Windy City for $100
on December 22, 1987.
Contrary to Kanter's testimony that there was no chance of
recovery on the LBG note, IRA's 1986 general ledger shows that
the $39,500 lent to LBG was repaid in full to IRA on February 19,
1986. This evidence indicates that the $10 sale price was an
arbitrary figure determined by Kanter that had no relationship to
the fair market value of the note in 1985 and that the sale to
Kanter was not entered into for profit by IRA but was an attempt
to establish a basis to claim a loss for tax purposes.
With respect to the Sherwood note, Kanter testified that the
"note was written off because there was no opportunity and no
chance of recovery", but he purportedly paid $1,000 for it. If,
in 1985, it appeared that there would be no assets from which to
collect the note, Kanter should not have been willing to pay
$1,000 for the note. In fact, the evidence shows that the note
was not worthless. Contrary to Kanter's testimony that there was
no chance of recovery on the Sherwood note, IRA's 1986 general
ledger shows that the $47,925 lent to Sherwood was repaid in full
to IRA on February 19, 1986. The fact that the loan was repaid
in full on February 19, 1986, shows that the note was not
worthless in 1985. This evidence indicates that the $1,000 sale
price was an arbitrary figure determined by Kanter that had no
relationship to the fair market value of the note in 1985 and
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