- 14 -
1954); Advest, Inc. v. Rader, 743 F. Supp. 851, 854 (S.D. Fla.
1990).
On reply brief, petitioner states that he does not contest
the receipt of $199,490 but argues that no more than $103,017 of
this amount represents a transfer from ACT, because: (1)
Petitioner had $13,873 of expenses associated with the sale of
ACT’s assets to JSL, and (2) $82,600 was paid to petitioner for
his entering into a covenant not to compete with JSL.12
12 On opening brief, petitioner argues that ACT should be
treated as having transferred to him no more than $67,017, an
amount arrived at by subtracting from $199,490 not only his
$13,873 of alleged sales expenses incurred and the $82,600
associated with the covenant not to compete, but also $36,000
that he alleges represented repayment of a loan by ACT.
Petitioner provides no explanation for the discrepancy in his
positions on opening and reply brief. We consider petitioner to
have abandoned his argument regarding ACT’s alleged repayment of
a loan to petitioner. This conclusion is consistent with
petitioner’s concession in Briggs v. Commissioner, T.C. Memo.
2000-380, that the full $199,490 is includable in his gross
income.
In any event, the evidence does not establish the existence
of any loan from petitioner to ACT or that petitioner received
the transferred assets in any capacity other than as a
shareholder of ACT. The only documentary evidence offered by
petitioner to establish the existence of loans to ACT was a
handwritten worksheet, apparently prepared by ACT’s accountants,
which indicates that $36,000 of the $199,490 transferred to each
of ACT’s four shareholders, including petitioner and John L.
Daniell (Daniell), represented “Loan Reductions”. Petitioner
offered no evidence to corroborate either the worksheet or ACT’s
alleged indebtedness to him. To the contrary, Daniell testified
that he could not recall whether he or the other shareholders had
ever made any loans to ACT. Also, ACT’s 1988 Federal income tax
return reflects no loans from shareholders. Petitioner has
failed to overcome the prima facie showing by respondent that
ACT’s transfers to petitioner included the $36,000 in question.
(continued...)
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