- 561 -
IRA also failed to show that the $28,939 note receivable
from Abernathy became worthless in 1987. Similarly, with respect
to the Forest limited partnership note, IRA did not establish
that (1) a bona fide debt, in fact, existed, and (2) that the
debt became worthless in 1987.
Issue 27. Whether IRA Is Entitled to Claimed Ordinary Losses on
Sales of Notes Receivable for 1987
FINDINGS OF FACT
On its Federal income tax return for 1987, IRA claimed total
ordinary losses of $1,176,670 on purported sales to MAF, Inc.
(MAF), of business notes receivable from the following entities:
Note Receivable Maker Claimed Loss
HELO $485,824
Safari 42,494
CMB Cinema Trust 30,512
CMB Cinema Trust II 7,209
RWL Cinema Trust 9,290
RWL Cinema Trust II 29,294
HGA Cinema Trust 57,725
Elk Investment 33,000
Inter-Alia Investment 53,968
Steve and Karen Hargen 3,452
HELO 78,034
Cedilla Invest. 345,868
Total 1,176,670
In the notice of deficiency, respondent disallowed the above
losses on the grounds that IRA did not establish its basis in the
assets sold or disposed of, it did not demonstrate that the
transactions had any substance, and the sales were to a related
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