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“most probably” repaid in the form of escort services. We held
that petitioner derived $4,000 in escort income from this
transaction. This evidence does not demonstrate that petitioner
is entitled to an interest deduction.
Petitioner also claims a deduction for interest paid to
Vania W., as a result of a $2,500 “loan” made to her by Ms. W.
“for investment purposes” in February 1990. However, the
documents petitioner offered in support of the claimed interest
payments are not competent evidence for this purpose,21 and Ms.
W. did not testify. Petitioner has failed to prove the amount of
any repayment to Ms. W. that may have occurred, or the amount of
principal repayment versus interest.
Petitioner claims a $200 interest deduction with respect to
a loan from Phillip B., but undercuts that claim with other
testimony to the effect that this loan was to be one with “no
interest”. She additionally claims that, if we find that she was
in the escort business, she is entitled to an interest deduction
of $875 for escort services provided to Ronald K. His testimony,
however, is that she provided the services (less frequently than
she now claims) only as a favor. Once again, this testimony
fails to support a finding that petitioner incurred a deductible
21 Ms. W.’s written statements regarding repayment were
excluded as hearsay, and the checks that petitioner claims
reflect repayment to Ms. W. were made out to petitioner herself
or cash.
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