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During 1987 through 1990, Mr. Viviano and petitioner made
several short-term loans/advances to Tri-City and Newark
Wreckers. There were no formal loan agreements created to
evidence these transactions. The parties followed the practice
of immediately repaying themselves when the entities were able,
usually within 3 weeks to 3 months. Petitioner alleges that he
has never been repaid at least $56,450 in loans and advances, and
he now contends that this amount offsets any gain he realized
upon the sale of M&V Investments to Mr. Viviano.
D. Newark Truck and Body Shop
With part of the funds secured from Mr. Viviano, in May
1990, petitioner purchased land and a vacant building located at
7373 Wells Avenue, in Newark, California, from Mr. Guarrusso for
$200,000. Upon receipt of the three cashier’s checks from Mr.
Viviano totaling $200,000, petitioner purchased two cashier’s
checks made payable to himself, one for $175,000 and the other
for $25,000. On May 16, 1990, petitioner took the $175,000
cashier’s check made payable to himself and purchased two more
cashier’s checks. One of the cashier’s checks was for
6(...continued)
The date listed next to petitioner’s signature on his 1990
income tax return is Aug. 14, 1991. The date listed on Tri-
City’s 1990 tax return is Dec. 21, 1991. There is no indication
in the record that petitioner filed an amended return for 1990.
There is no indication that petitioner has ever reported this
sale of his interest. Petitioner testified that he believed that
he had reported the sale.
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