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With respect to the losses claimed on the sales of IRA's
notes receivable from Tanglewood, LBG, and Sherwood, IRA's
adjusting journal entries and Kanter's testimony indicate that
these notes receivable were sold by IRA to Kanter. IRA failed to
establish that Kanter did not indirectly own more than 50 percent
of IRA, and, therefore, the claimed losses are not allowable.
See sec. 267(a) and (b)(2). In fact, the evidence indicates
that Kanter did indirectly own more than 50 percent of IRA within
the meaning of section 267(b)(2). During 1985, the sole
shareholder of IRA was BRT, and the beneficiaries of BRT were
members of Kanter's family within the meaning of section
267(b)(1) and (c)(4). Stock owned by BRT is considered as being
owned proportionately by its beneficiaries, members of Kanter's
family. See sec. 267(c)(1). Stock owned directly or indirectly
by members of Kanter's family is considered owned by him. See
sec. 267(c)(2). Since the beneficiaries of BRT are considered to
own the stock of IRA, the beneficiaries of BRT are members of
Kanter's family, and Kanter is considered as owning the stock
owned by members of his family for purposes of section 267(b)(2),
Kanter owned more than 50 percent of IRA. Therefore, IRA's
claimed losses on its sales of the Tanglewood, LBG, and Sherwood
notes receivable to Kanter are not allowable. See Pomeranz v.
Commissioner, T.C. Memo. 1980-36 (disallowing a loss on a sale of
stock by the taxpayer to a corporation owned by a family trust
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