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petitioner is entitled to a deduction for a $2,052,900 ordinary
loss from a debt conversion transaction; (7) whether petitioner
is entitled to claim a $1,859,135 bad debt deduction for its
taxable year ended November 30, 1997, with respect to loans
petitioner purportedly made to CMA Capital Corp.; (8) whether
petitioner should include in its income the $2 million portion of
a consulting fee that petitioner paid to Crispin Koehler Holding
Corp. in early 1997; (9) if the $2 million is includable in
petitioner’s income for its taxable year ended November 30, 1997,
whether petitioner is entitled to deduct its payment of $2
million to Crispin Koehler Holding Corp. as a business expense;
(10) whether petitioner is entitled to a $76,705 bad debt
deduction for its taxable year ended November 30, 1996, with
respect to its advances to Richard Koehler; and (11) whether
petitioner is liable for penalties under section 6662 for its
taxable years ended November 30, 1996 and 1997, with respect to
portions of its underpayments for those years attributable to its
claimed lease strip deal deductions.
FINDINGS OF FACT2
Petitioner is a California corporation. At the time the
petition was filed, petitioner maintained its office and
principal place of business in Burlingame, California. At all
2The parties’ stipulations of fact and the exhibits attached
thereto are incorporated herein by this reference.
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