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$60,000 to $80,000, including $60,000 in 1994. One of these
businesses, a corporation called Indian Falls Racquet Club
(Indian Falls), experienced financial difficulties soon after it
opened. Ms. Weinstein borrowed money from petitioner in order to
keep Indian Falls running.
Petitioner lent the money in installments of irregular
amounts at irregular intervals, over a period of approximately 8
months. There was no formal agreement as to the terms of a
loan; rather, it was understood that Ms. Weinstein would pay back
the amounts as soon as possible. She did not pay back any of the
amounts, and petitioner continued lending additional amounts
until the total grew to $44,000. Eventually, on August 23, 1989,
she and petitioner formalized the existence of the debt and
established a repayment schedule with a document entitled “Loan
Agreement”. The Loan Agreement provides for a loan from
petitioner to Ms. Weinstein of $44,000 for a period of 3 years at
10 percent interest.
Indian Falls was a seasonal business, opening April 1 and
closing after Labor Day each year. At the end of each season up
to and including 1993, Ms. Weinstein did not make a profit from
Indian Falls, and the income she received from offering tennis
lessons (separate from Indian Falls’s business) was sufficient
only to maintain her standard of living. In each year from 1989
through 1993, after the close of Indian Falls for the season, Ms.
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