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JAC Ranch. Although petitioner did provide funding to Mrs.
Corrigan for the operation of the activity, there is no showing
that the character of these advances was debt or equity. Even if
the advances constituted an equity interest, that would not
necessarily entitle petitioner to share in profits and losses.
Petitioner has alleged that there was a written agreement
between him and Mrs. Corrigan regarding the sharing of profits
and losses, etc. No such agreement was produced, and no
corroborating evidence was provided in support of petitioner’s
self-serving allegations.
In view of the foregoing, we hold that petitioner has not
shown that he is entitled to claim losses from the horse breeding
activity.
VII. Unreported Income
Respondent determined that petitioner failed to report
various items of income, including dividends, interest, State
income tax refunds, and royalties during the years in issue.
With the exception of a $1,902 adjustment that respondent now
concedes was in error, petitioner has failed to present any
evidence to show that respondent’s determination was in error.
The net amounts of unreported income for 1987, 1989, 1990, and
1991 are $44, $5,587, $15, and $26, respectively. For 1988,
respondent determined that petitioner overstated the various
items of income by a net amount of $539.
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