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amount and nature of petitioner’s guaranties of his corporations’
debts. Although the record contains notices of judgment against
petitioner, the notices generally provide no explanation of the
specific circumstances of the judgments or of the underlying
debts giving rise to them. The notices that do provide
explanations do not establish that the underlying debts related
either to Bonnevista or Castle Towers. In at least one instance,
the evidence clearly indicates that the judgment against
petitioner was for his own debts, rather than those of Bonnevista
or Castle Towers.11 In short, petitioners have failed to show
that petitioner repaid, directly or indirectly, Bonnevista’s or
Castle Towers’ loans to him.
C. When Did the Discharges of Indebtedness Occur?
Petitioners contend that if there was any discharge of
indebtedness, it must have occurred in 1992 rather than 1993,
because Bonnevista and Castle Towers went out of business in
1992. The record does not support this contention, which is
contradicted in part by petitioners’ own petition, which alleges
that Bonnevista was involved in litigation with creditors until
1997. Petitioner testified vaguely that he “lost” Bonnevista and
11 A Federal District Court order, dated Sept. 22, 1992,
entering judgment of $832,806 against petitioners and various
other parties, not including Bonnevista or Castle Towers, in
favor of Holroyd Enterprises, Inc., indicates that the underlying
debt on which the judgment was based was a promissory note
executed by petitioner and secured by a mortgage on the Shorewood
Marina & Yacht Club.
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