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that petitioner engaged in these lending transactions to earn a
profit from the interest on the loans. We cannot conclude that
the numerous loans over the course of years were part of any
trade or business of petitioner.
With respect to IBC, petitioner claims that he made 125
separate loans or advances totaling $397,738 to IBC between 1979-
1986. Petitioner testified that those loans were made whenever
IBC was “short of money, and they needed help” and that he got
interest on these loans. Petitioner relies on a handwritten
schedule entitled “Loans from T.K. Scallen to IBC: checks
written to IBC by TKS”, which lists the dates of the purported
loans, their amounts, and the check numbers for the loans. The
record otherwise does not show the circumstances of the loans to
IBC, and we have no reasonable basis for concluding whether those
loans represented bona fide indebtedness, from where petitioner
obtained the funds advanced to IBC, and whether petitioner
expected to earn a profit from the interest on those loans.
With respect to the many advances made to WMG in 1989-92,
petitioner claims that those advances should be considered loans
made as part of his claimed lending and financing business.
22(...continued)
to fund his lending activities at a lower interest rate than his
customers, and “he could earn a profit from the interest rate he
charged in excess of what he paid.” Moreover, in that case, the
taxpayer maintained amortization schedules containing interest
rates, and the number of payments was printed and distributed to
the borrowers. None of those facts are apparent herein.
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