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petitioner’s 1987 return has no relevance to business expenses of
the sole proprietorship in 1982, 1983, and 1984, because any
business expenses taken as deductions for those years were
incurred before Taxman existed. In addition, we concluded above
that the record does not support that Taxman assumed any
liabilities other than two bank loans. Therefore, petitioner had
income of $310 in 1990 from Taxman’s payment for petitioner’s
personal legal expenses.
In 1990, Taxman also repaid a bank loan for $2,000, plus
interest of $147, that had been obtained in petitioner’s name in
July 1989. Petitioner claims that he obtained the loan in his
own name because Taxman had reached the limit of its line of
credit with the bank. Petitioner testified that he deposited the
funds into WFIC’s account, and WFIC used the funds until it
received its tax refund in 1990.
The 1989 bank statements for WFIC, Taxman, and petitioner
are not part of the record. Petitioner offered no evidence that
Taxman’s credit limit had been reached or that the loan funds
were deposited into WFIC’s bank account. We give little weight
to petitioner’s testimony on this matter given that he claimed
Taxman had reached the limit of its line of credit but WFIC used
the funds and repaid the loan. We do not believe petitioner has
met his burden of proving the $2,147 was not repaid on his behalf
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