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that GCC, petitioner, and Elmco owed to each other. The
Depository Agreement could not be modified, rescinded, or
amplified except by a writing signed by petitioner, Elmco, and
GCC. Pursuant to the Depository Agreement, payments went as
follows: (1) GCC made lease payments to First Interstate; (2)
First Interstate credited petitioner's account for GCC's rental
payments; (3) First Interstate then debited petitioner's account
for payments to Elmco on petitioner's Buyer Acquisition Note; (4)
First Interstate credited Elmco's account for petitioner's Buyer
Acquisition Note payments; (5) First Interstate then debited
Elmco's account for payments to GCC on its installment note; and
(6) First Interstate credited GCC's account for Elmco's
installment note payments. If First Interstate received any
additional payments, it held those funds in petitioner's account
until receipt of a written directive signed by all three parties.
On their 1982, 1983, and 1984 joint Federal income tax
returns, petitioners claimed losses from petitioner's computer
purchase and leaseback investment in the amounts of $75,000,
$110,000, and $105,000 respectively. Respondent disallowed these
deductions in the October 18, 1989, notice of deficiency.
OPINION
The first issue we must decide is whether petitioner is "at
risk" with respect to the long-term Buyer Acquisition Note. As
stated above, respondent stipulated that petitioner is at risk
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