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1963 Medicor acquisition of the Olmstead County Bank. He relies
solely on his own testimony, which we find less than compelling:
Q Do you recall what fee that was, or the amount of
that fee?
A I believe -- and I’m not sure. This was a long
time ago. But I think it was 1 percent of the amount
of the loan.
Petitioner also claims that he received a 1 and 3/4-percent fee
on what he purports to be South Pacific’s loan of $3 million to
Northwest on June 17, 1971. To support his position, petitioner
cites his attorney’s opening statement and an annual report
submitted to the Securities and Exchange Commission. Neither of
those items supports petitioner’s position.
Petitioner suggests for the first time on brief that, with
respect to WMG, “If, as the Commissioner suggests, the taxpayer
was trying to preserve his income as an officer of the
corporation, then he is entitled to take the deductions as
ordinary losses.” It is well established that a taxpayer’s
status as an employee is a business interest. See United States
v. Generes, 405 U.S. 93, 101 (1972); Halle v. Commissioner, T.C.
Memo. 1983-760. However, it is a fact that petitioner did not
receive wages or other compensation for services from WMG during
the period 1987 to 1995. Thus, it is not plausible that
petitioner made the loan to WMG with the dominant motivation of
protecting any business interest as an employee in WMG, and there
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