- 20 - there may have been additional amounts advanced to Mr. Assaad, which we cannot state with certainty were applied to the Atherton project as deductible expenses. We might agree that, in certain circumstances, construction loans might provide a basis for estimating deductible expenses or basis. However, petitioners have not established to our satisfaction that all the loans that they rely upon herein were construction loans. Mr. Assaad’s general testimony and his specific testimony with respect to the First National loans did not assist petitioners in substantiating their construction expenses or otherwise convince us that the various loans provide a rational evidentiary basis for estimating their expenses. Indeed, with respect to the additional First National loan of $100,000, Mr. Assaad testified that he could not remember what this additional loan was for or “anything”. Further, petitioners have not established that the usual formalities for advancing funds on construction loans were followed with respect to each of the loans that petitioners rely upon. With respect to the loans from First National, Mr. Black testified generally regarding the formalities followed with respect to construction loans. However, he could not recall the specifics of the loans to Mr. Assaad or Mr. Assaad’s actual association with those loans. The record does not reflect, and petitioners did not introduce any evidence, regarding anyPage: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
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