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4. No lease agreements were entered into between Diane
Racing and petitioners regarding Diane Racing’s use of the Diane.
5. Petitioners never formally documented any loans made by
them to Diane Racing.
6. No interest was charged on, no collateral was offered
for, and no repayments were made on the aforementioned loans.
7. During the years in issue, petitioners did not maintain
complete records of the races in which the Diane competed.
8. The president of Diane Racing, petitioners’ son, was a
full-time medical student or medical resident during the years in
issue.
9. During the years in issue, Diane Racing sustained over
$470,0005 in total losses compared with less than $41,000 of
income--i.e., Diane Racing’s losses were more than 10 times
larger than its income.
10. The Diane is classified by the U.S. Coast Guard as a
recreational vessel.
Furthermore, the documentary6 and testimonial evidence
established, among other things, the following facts:
5 The parties did not specifically stipulate the amount of
the loss for 1994. The parties, however, stipulated Diane
Racing’s tax return for 1994, which lists Diane Racing’s losses
for 1994.
6 We note that almost all of the exhibits were jointly
stipulated.
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Last modified: May 25, 2011