Don E. Kramer - Page 12




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          agreement entered into by BERM.  There was no attempt to                    
          renegotiate these contracts on behalf of Kramer Hospitality.5               
          See Haley Bros. Constr. Corp. v. Commissioner, 87 T.C. 498, 515-            
          516 (1986).                                                                 
               Petitioner has failed to show that a liquidating                       
          distribution of BERM’s assets occurred in 1994.  Petitioner has             
          not offered any corroborating evidence, besides his testimony, to           
          establish that any distribution, liquidating or nonliquidating,             
          occurred in 1994.  It is well settled that we are not required to           
          accept a taxpayer’s self-serving testimony in the absence of                
          corroborating evidence.  See Niedringhaus v. Commissioner, 99               
          T.C. 202, 212 (1992).                                                       
               Assuming arguendo, that petitioner did attempt to distribute           
          BERM’s assets to himself, Illinois law prohibits such a                     
          distribution if the corporation is insolvent.  See 805 Ill. Comp.           
          Stat. 5/9.10(c)(1).  After reviewing BERM’s bank accounts,                  
          corporate tax returns for 1994, Forms 1120 and 1120X, and                   
          petitioner’s testimony, we find that BERM could not make a                  
          liquidating distribution, as petitioner suggests, because it was            
          insolvent at that time.6                                                    


               5    Petitioner testified that he conferred with his agent             
          about the insurance contracts and it was “kind of a calculated              
          decision” to maintain BERM’s insurance due to the insufficiency             
          of his personal cash flow.                                                  
               6    According to BERM’s Form 1120, U.S. Corporation Income            
                                                             (continued...)           





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