- 14 - Electric & Neon, Inc. v. Commissioner, 56 T.C. 1324, 1339 (1971), affd. without published opinion 496 F.2d 876 (5th Cir. 1974); Haber v. Commissioner, supra at 266. Because both Simco shareholders acquiesced in the treatment of the proceeds from the latter half of 1991 as a loan repayment, we believe special scrutiny is appropriate in the instant cases. Based on all the facts and circumstances, we find that petitioners have failed to prove that John’s retention of the proceeds from scrap metal sales during the period July 1 through December 31, 1991, was intended to be the repayment of a loan. First, we note the general confusion on the part of petitioners about who lent what to whom. Petitioners executed stipulations in these cases stating that Simco characterized the scrap metal proceeds received during its fiscal year ended June 30, 1992 as a loan from Simco to John. In his opening statement at trial, petitioners’ counsel argued that these proceeds “should be considered a loan to Mr. McLean”. However, on brief, for the first time, petitioners take a different position; namely, that these proceeds constituted Simco’s repayment of a loan to it by John. This mutation in petitioners’ position is emblematic of the confused state of the record regarding the purported loan transaction. Although the record contains copies of certain demand notes obligating Simco to pay John (and Neal) various amounts, the notes themselves are ambiguous as to their date ofPage: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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