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with regard to Telim, that any such losses were incurred in 1990,
that funds they paid to or on behalf of Telim (and on which the
alleged bad debt losses are based) constituted loans, and that
whatever losses petitioners incurred with regard to Telim
constituted anything other than section 1244 losses.
No credible evidence supports the existence of the alleged
loans from petitioners to Telim. No promissory notes exist. No
repayments were made to petitioners. To the contrary, with
regard to funds petitioners paid to or on behalf of Telim
petitioners were issued additional stock in Telim. Telim's
corporate Federal income tax returns for 1987 and 1988 showed
only small loans to shareholders, and Telim's corporate Federal
income tax return for 1989 did not reflect any loans to
shareholders.
By the end of 1987, Telim had ceased operations. In 1988,
Telim sold off its assets. In 1989, Telim filed its final tax
return. On petitioners’ 1990 and 1991 joint Federal income tax
returns as originally filed with respondent, petitioners did not
claim any losses relating to petitioners’ investment in Telim.
No credible evidence supports petitioners’ claim that their
losses with regard to Telim should be treated as 1990 losses.
In 1988, petitioners were authorized to sell off assets of
Telim. The evidence does not establish what funds were realized
on such sales and what portion thereof was retained by
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