Victor M. Bello - Page 10




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          during 1992.  Amazona reported its taxable income on a cash                 
          method of accounting.                                                       
               On an amended 1992 return, Amazona reported an ordinary loss           
          of $48,579.  This loss resulted from payments by Amazona during             
          1992 for entertainment fees of $47,000, legal fees of $794,                 
          travel expenses of $743, and meals and entertainment expenses of            
          $42.                                                                        
               On his 1992 return, petitioner (as 100-percent shareholder             
          of Amazona) claimed a "nonpassive loss" of $28,589 from Amazona.            
          His return reflected Amazona to have had an ordinary loss of                
          $48,579 for 1992, but further stated that only $28,589 of that              
          loss was allowable to him for 1992 after application of the at              
          risk provisions of section 465.                                             
          Roadmaster Leasing                                                          
               In 1992, petitioner met with Lyle Schole, the promoter of a            
          proposed venture called Roadmaster Leasing.  They discussed                 
          entering into a limited partnership engaged in the business of              
          buying late-model, used automobiles in the United States to                 
          resell in Latin America.  Petitioner further met and discussed              
          the proposed venture with Jose Candelario, an accountant Mr.                
          Schole had retained to perform tax work for Roadmaster Leasing.             
               Petitioner agreed to invest and purchase a partnership unit            
          in Roadmaster Leasing for $25,000.  On September 21, 1992,                  
          petitioner paid $5,000 to Mr. Schole as a downpayment on his                






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