Kamil F. and Nagwa Gowni - Page 39

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          City and Bishoy during the course of their ownership and does not           
          include an analysis of the amounts that these corporations paid             
          to the Gownis prior to 1999.  Without knowing the amounts of the            
          outstanding shareholder loans due to the Gownis from Mina of                
          Forest City and Bishoy for 1999, it is impossible to determine              
          the amount of the distributions that the Gownis received from               
          these corporations during 1999 that could be characterized as               
          repayment of these loans.                                                   
               Fifth, the Gownis have not established how much compensation           
          Mr. Gowni received for the services that he provided for Mina of            
          Forest City and Bishoy.  Mr. Gowni testified that he worked 10              
          hours per day 5-6 days per week for his business entities                   
          (including Mina of Forest City and Bishoy) during the years in              
          issue.  It is unlikely that Mr. Gowni received no compensation              
          for those services.  It is more likely than not that the                    
          distributions were compensation rather than loan repayments.                
               We conclude that the Gownis did not intend to create a true            
          debtor-creditor relationship with Mina of Forest City and Bishoy.           
          The Gownis treated these entities as their own personal bank,               
          depositing and withdrawing funds at will.  Accordingly, we                  
          sustain respondent’s contention that the distributions that the             
          Gownis received from Mina of Forest City and Bishoy during 1999             
          did not constitute repayment of bona fide loans.                            








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