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such an interest. Sec. 465(b)(3)(B)(ii), I.R.C.,
dealing with amounts borrowed by a corporation from its
shareholders, does not apply to except P from sec.
465(b)(3)(A), I.R.C.
2. Held, further, P is not liable for penalties
under sec. 6662, I.R.C.
Burns Mossman, Steven J. Roy, and Angela L. Watson, for
petitioners.
Deanna R. Kibler and Albert B. Kerkhove, for respondent.
OPINION
WELLS, Judge: Respondent determined deficiencies in
petitioners' income taxes of $60,371, $14,884, $6,875, and
$20,173 for their 1988, 1991, 1992, and 1993 taxable years
respectively, and additions to tax pursuant to section 66621 of
$2,977, $1,375, and $4,035 for their 1991, 1992, and 1993 taxable
years respectively.
In the instant case, after concessions, we must decide the
following issues: (1) Whether petitioner Larry Van Wyk is at
risk with respect to a loan he made to an S corporation in which
he owns 50 percent of the stock, where the source of the funds
constituting the loan is the other 50-percent shareholder and
1 Unless otherwise noted, all section and Code references are
to the Internal Revenue Code in effect for the years in issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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