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Tax Regs. (“the amount realized from a sale or other disposition
of property includes the amount of liabilities from which the
transferor is discharged as a result of the sale or
disposition”).
Petitioner also alleges that he made $56,450 in
loans/advances to Tri-City and Newark Wreckers for which he was
never reimbursed. In support thereof, he introduced copies of
checks made payable to the two entities that he alleges were
unpaid “loans”. Petitioner’s business partner, Thomas Viviano,
testified that each partner would periodically advance/lend funds
to the entities on a short-term basis. There were no formal loan
agreements made between the businesses and their owners. Mr.
Viviano testified that it was the practice of the entities to
immediately payback these “loans” as the entities earned income,
usually within a few months. Petitioner, on the other hand,
testified that at the time he sold his interests to Mr. Viviano,
he was owed $16,200 from Tri-City and $40,250 from Newark
Wreckers.
We find Mr. Viviano to be credible. Tri-City’s 1989 Form
1065 shows that advances from partners went from $62,938 at the
beginning of 1989 to $0 at the beginning of 1990. Thus, we find
petitioner was not owed $16,200 from Tri-City at the time he sold
his interest. Newark Wreckers is a different story. The 1989
and 1990 Forms 1120 for Newark Wreckers show a beginning and an
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