Dennis W. Stark - Page 16



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               We do not believe that the record, including the testimony             
          of petitioner's attorney, supports petitioner's contention that             
          the cost of collecting on the alleged debt would have exceeded              
          its value.  Petitioner's attorney in the litigation over the                
          Redemption Agreement, William Horton, testified that based on his           
          experience in litigating against William, he believed that                  
          William would be a tenacious and difficult adversary in any                 
          further litigation.  In light of this experience, Mr. Horton                
          believed that pursuing the debt "wasn't worth it" and so advised            
          petitioner and his accountant.                                              
               This testimony does not establish that the costs of                    
          collection would exceed the value of a debt claimed to equal                
          $134,116.  Indeed, petitioner presented no evidence that he or              
          Lakeview ever even made a demand for payment to William.  In                
          light of the fact that William had sufficient assets with which             
          to pay the alleged debt, we do not believe that petitioner has              
          proven that attempts to collect on the debt would have been                 
          futile.  We thus conclude that petitioner has failed to prove               
          that, assuming a bona fide debt existed, it was worthless.                  
          2. Rent Deduction                                                           
               Lakeview deducted $75,000 as rent on its 1992 return, which            
          was disallowed by respondent.  Petitioner claims that Lakeview              
          paid $75,000 to William in late 1992 as "back rent" on the Fence            
          Property.  Petitioner testified that sometime after the                     
          conclusion of the trial in the action brought by William, William           
          demanded that he be paid rent by Lakeview for Lakeview's use of             



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