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number of a check listed on a deposit statement for the Miles &
Cumbie P.A. Trust Account. The deposit statement is dated July
8, 1988, the check is in the amount of $140,000, and the deposit
slip was filled out by Ms. Goodman. Petitioner has shown that
the issuance of the $140,000 Dean Witter check on July 7, 1988,
the deposit of $140,000 to Mr. Miles’s law firm’s trust account
on July 8, 1988, and the deposit entry of $140,000 on the
Medlin/Prather Ranch Property ledger card were more than mere
coincidences and that the source of the deposit entry was the
Dean Witter check. Nevertheless, petitioner has not shown that
the Dean Witter check was a loan; i.e., that the check was a
nontaxable source of income. See Polidori v. Commissioner, T.C.
Memo. 1996-514.
At trial, petitioner testified that he needed to make a
mortgage payment on what petitioner refers to as the Partin
property, that he called Richard Margolis up and told him he
needed some money, and that Mr. Margolis lent him the $140,000 at
issue. Petitioner testified that Mr. Margolis’s representative
recommended:
rather than do a mortgage, have me deed them the
property, or deed or convey them the beneficial
interest in the property, if I only held the beneficial
interest, and then give me an option to buy it back at
this continually accelerating price, which was
reflective of the interest rate. And that’s what
happened here.
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