Kevin P. Osborne - Page 5

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          made by petitioner to himself.  Furthermore, even if there had              
          been a separate entity to which a loan could have been made,                
          petitioner has not provided any reliable evidence of a loan.  The           
          alleged loan document provided by petitioner (which relates only            
          to the alleged 1990 loan) is not reliable because it consists of            
          one paragraph, does not require interest payments, does not                 
          require the repayment of principal at any time certain, and                 
          although it refers to a secured party does not provide security             
          for the loan.  Furthermore, petitioner’s testimony concerning               
          David Killian, who signed the document as a witness, suggests               
          that the document may have been signed at a later time and                  
          backdated to 1990.  Petitioner also produced as evidence copies             
          of two amended returns allegedly filed in 1993 for the taxable              
          years 1990 and 1992.  Attached to each return was a sheet of                
          paper on which the amount of reported Schedule C income was                 
          divided into two categories:  “1099 Farmers” and “Loan Kevin”.              
          The total Schedule C income was $57,504 in 1990 and $162,650 in             
          1992.  The loan income was listed as $31,712 in 1990, and $55,293           
          in 1992.  It is unclear why these returns were to be filed                  
          because no changes in taxable income or tax liability were shown            
          on them.  In any event, these are mere uncorroborated assertions            
          by petitioner and are not reliable evidence.                                
               Second, assuming arguendo that a loan had in fact been made,           
          the repayment of one’s own debt generally is not deductible.                

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