Erickson Post Acquisition, Inc. - Page 17

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          amount.  Furthermore, securing petitioner’s obligation to repay             
          the $175,000 with the mortgage on petitioner’s real property                
          effectively prevented any accretion to petitioner’s wealth                  
          attributable to the Amoco advance when the payment was made.                
               Respondent asserts that petitioner received the Amoco                  
          advance under a claim of right and, therefore, the advance was              
          income to petitioner in 1996.  We disagree.  The claim of right             
          doctrine relates only to taxation of income.  The receipt of                
          money by a borrower in a loan transaction is excluded from the              
          doctrine.  James v. United States, 366 U.S. at 219; see also                
          Krakowski v. Commissioner, T.C. Memo. 1993-266.  We have found              
          that the $175,000 Amoco advance was a loan to petitioner.  Thus,            
          the claim of right doctrine does not apply.                                 
               To reflect the foregoing,                                              


                                             Decision will be entered for             
                                        petitioner.                                   

















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